Citigroup bedankt USA-burger voor steun en vraagt nu $60 per credit-card

[Ernst Debets]

REPLY TO: D66 at nic.surfnet.nl

In Nederland zou er binnen de kortste keren in dit soort situaties een
Pieter Lakeman opstaan en oproepen tot een bankrun. Zou misschien de
oplossing tegen dit soort acties zijn. Nu is echter een bestedingspatroon
van USD 2.400,- per jaar (USD 200,- per maand) nou ook niet zo extreem hoog:
kijk maar eens welk bedrag je maandelijks van je rekening via pinpas
betaald. Dat is gemiddeld meer dan EUR 150,- die Citibank hier als
bestedingspatroon (omgerekend naar EUR) vraagt om niet voor USD 60,-
aangeslagen te worden. Bovendien: de Creditcard heeft in de USA dezelfde
positie als de pinpas hier. De soep wordt dus niet zo heet gegeten als hij
wordt opgediend.

Ernst Debets/
Zaanstad

-----Oorspronkelijk bericht-----
Van: owner-d66 at nic.surfnet.nl [mailto:owner-d66 at nic.surfnet.nl] Namens Cees
Binkhorst
Verzonden: dinsdag 9 maart 2010 20:27
Aan: Discussielijst over D66
Onderwerp: Citigroup bedankt USA-burger voor steun en vraagt nu $60 per
credit-card

REPLY TO: D66 at nic.surfnet.nl

Zouden ze daarmee nu hun handen niet meer hoeven op te houden?
Ben benieuwd, denk namelijk dat ze nog een keer gaan komen (om geld
bedoel ik ;)

Groet / Cees

Citi to taxpayers: Thanks for the bailout, now pay up
Vikram Pandit

Citi won't say how many of its millions of cardholders nationwide are
subject to the new annual fee, which takes effect April 1. Above,
company Chief Executive Vikram Pandit. (Jay Mallin / Bloomberg / March
4, 2010)
The banking giant is showing its appreciation for a $45-billion infusion
from the U.S. by slapping a $60 annual fee on many credit cards.
By David Lazarus

March 9, 2010
Vikram Pandit, chief executive of Citigroup Inc., thanked taxpayers the
other day for coming to his company's rescue with $45 billion in bailout
cash.

"Citi owes a large debt of gratitude to American taxpayers," he told
lawmakers in Washington. The bailout money, Pandit said, "built a bridge
over the crisis to a sound footing on the other side."

And how is Citi expressing its gratitude for that act of taxpayer
generosity?

It's slapping a $60 annual fee on many credit cards that previously had
no fees and telling customers that if they don't like it, tough
patooties. They can pay off any outstanding balance and take their
business elsewhere.

Man, if that's Citi when it's grateful, I'd hate to see the company when
it's cheesed.

Bank of America Corp. unleashed its own annual fee of as much as $99 on
some cardholders last month. JPMorgan Chase & Co and Wells Fargo & Co.
both say they have no plans to introduce such fees, but it's probably
just a matter of time.

Citi isn't saying how many of its millions of cardholders nationwide are
subject to the new fee, which takes effect April 1.

But it is saying that if you still want to keep your account, and if you
want to avoid the fee, you'll have to run up at least $2,400 a year in
purchases using that credit card.

Samuel Wang, a Citi spokesman, said imposing the fee was "necessary
given the increasing cost of doing business."

He also patted Citi on the back for "taking a very different approach
than others in the industry by communicating these changes in a clear way."

Wow -- communicating clearly with customers. What will the banking
industry think of next?

Lake Forest resident Betty Atwell was among those who recently received
notice that one of her four Citi cards will be hit with the annual fee.
It's a card she's had for more than a dozen years and one that she
seldom uses.

"These days, I only use cards that have some kind of reward, such as
giving cash back," Atwell, 66, told me. "This card with the new fee
doesn't have any rewards."

So close down the account. Easy, right?

Not exactly.

"My concern is that my credit score will be affected if I start
canceling cards with annual fees," Atwell said. "Right now it's Citi,
but you just know the other banks will follow."

She's right to be concerned.

Linda Sherry, a spokeswoman for the advocacy group Consumer Action, said
canceling an older card that reflects long-term creditworthiness can
indeed have an impact on your credit score.

"You might see your FICO score go down by as much as 100 points," she said.

FICO scores range from 300 to 850. A score above 700 is typically seen
by lenders as a sign of good financial health. Anything below 600
represents a greater risk for lenders and can result in higher interest
rates.

This is where lenders have people between a rock and a hard place. Yeah,
you can close down your account, but your credit score might get dinged
in the process.

Sherry said cardholders in this position should take a long view and
figure that even if they lose FICO points for canceled cards, they'll
gradually earn those points back with a good credit record.

"Unless you're going to be buying a house in the next year or so, you
should probably just let the suckers go," she said. "You don't always
need a perfect credit score."

And if you're a Citi customer, you at least can take solace that the
company appreciates your helping hand when times were rough.

Just don't expect anything else in return.

Quake insurance

Last week's column on sky-high earthquake insurance premiums and
deductibles drew plenty of responses from homeowners throughout
California saying they too are either paying through the nose for
coverage or can't afford protection.

It also prompted a sharp reaction from the state Department of
Insurance, which said my tale of woe about Reseda resident Yves Didier
wasn't unique.

Didier, 45, had to drop coverage after his insurer, Northern
California-based GeoVera Insurance Co., nearly tripled his annual
premium to $7,100 and raised his deductible to more than $100,000.

GeoVera's CEO, Kevin Nish, told me that the rate hike was fair and had
been approved by the Department of Insurance.

Jason Kimbrough, a spokesman for Insurance Commissioner (and
gubernatorial candidate) Steve Poizner, acknowledged that officials did
give the go-ahead for a change in the way GeoVera values insured properties.

"But I don't think anyone who dealt with the settlement anticipated rate
increases of 200% or 300%," he said. "That's a pretty astronomical jump."

Kimbrough said that "dozens of rate-related complaints" have been
received from GeoVera customers. He declined to be more specific because
the Department of Insurance is still tallying the complaints. Kimbrough
said the agency's options include negotiating rate reductions on behalf
of customers.

GeoVera's Nish responded that the possible tripling of some customers'
premiums had been disclosed in advance to state officials.

"We remain confident that our rate filing was implemented properly," he
said.

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