Saturday, January 24, 2009

Shitty Bank and Your Tax Dollars at Work (ripping you off)

On the condition of anonymity a noted musician, award-winning author and friend of mine, has graciously accepted my request to share his recent credit card fiasco with all of you.

The last time I bought a book of stamps, the postal rates went up again before I had used them up, so I don't keep stamps around.

So when I had to postal-mail a number of pages of legal mumbo-jumbo back to a corporate business office last week so they could pay me for something I did last summer, it meant a trip to the post office, which is always a mission of last resort. It was a high ratio of mumbo-jumbo to dollars paid out, too--all the pages of both copies of the "agreement" wouldn't fit in a standard business envelope, and I didn't have a flat document mailer.

So I stood in line at the post office--a long line--to buy a 99 cent document mailer, then went off to address it, sign the documents, and use the automated kiosk to weigh it and purchase the $1.68 postage the envelope would need. The automated kiosk wouldn't take cash, of course, you had to have plastic. So I dipped Mr. Credit Card into the slot.

Declined. Huh?

Back into the line--wait, wait, wait--to hand over $1.68 in cash to a human.

So why was my card declined?

We have a Citibank credit card that has what I'd call a high balance. It's at 11%, and I'm careful to keep the payments current. We've had this card for 20 years. It expires next month, and we always receive a new one in the mail when that happens.

But this month something weird happened. It went over the credit limit. I thought I had made the payment. And in fact, I had. Turns out that Citibank unilaterally jacked up the interest rates on a number of cards--at least that's what they told us when we called. From 11% to 24.99%.

At a time when the Fed has a near-zero interest rate. They're getting the money for free, and charging me 24.99% for it.

And--*if* I have this right, but hey, I only have a master's degree, and not in finance--that higher interest rate pushed the balance over the top,triggering a $39 over-the-limit fee, which will now continue to rack up interest in turn, into the infinite future.

That $39 fee plus interest? It now counts as an asset on Citibank's books. Which means it's part of the assets of our country. But it doesn't exist. They made that $39 up. It's a nonconsensual hallucination. No new nugget of gold was dug out of the earth to match it. It doesn't represent any new productivity on my part. That $39-plus-interest-into-infinity is phantom money that Citibank has decided it's entitled to.

How much of Citibank's assets is phantom money? Apparently, quite a lot.

Well, we have to get this interest rate down, we said to the helpful Citibank representative on the phone. There are two ways to do it, said the helpful representative: one will drop us back down to the interest rate we had before, but the card then will not be renewed when it terminates in February. A-ha, after milking us steadily for finance charges over twenty years, they're now trying to limit their exposure to new purchases. The other option is to take a 13.75% rate and the card will be renewed. We took the 13.75% rate.

This kind of thing used to be called loansharking.

The moral of this story is, if you have credit cards (and you probably do), watch 'em like a hawk right now, because they're pulling some funny shit.

Such bullshit. The Mob must be pissed at the banking industry legally adopting their m.o. And WE are paying for it/making it happen.

Happy Juneteenth!