I got a credit card offer in the mail today from Citi. I’d been pre-approved to apply, it told me, or I could just go to their website and I’d be approved in fewer than five minutes. (I wonder if the new Consumer Protection Act requires all the same information be displayed on the websites).
The application that was enclosed looked like a check, and it had two blank areas to list information and a place to sign my name, and that was it. Easy-peasy.
I already have all the credit cards I need (two), but I unfolded the Citi Disclosures form that they are now required to print in a font size a human being can read, instead of in the pt1 font they used to use. The disclosure was interesting.
Interest Rates (yes, this caught my interest all right):
Introductory, until 10/1/2011—-0%
After that, 9.99% which might fluctuate with the Prime Rate.
APR on balance transfers, which are encouraged in the advertizing material: 25.24%
Penalty APR, and when it applies. Penalty: Up to 29.99% based on “your creditworthiness.” It may be applied if I make a late payment, or pay with a check that bounces. How long will I have up to 29.99% as my APR? Well, that’s interesting. It could possibly be lowered on existing purchases ( in other words, the balance up until the payment I missed,) if I make timely minimum payments for six consecutive months; however, on any transactions going forward, the “penalty” APR may apply indefinitely. In other words, meet your new APR; 29.99%
There is also a late fee in addition to the “penalty APR” and a minimum interest charge regardless of what percentage of the balance it is. The min interest is 50 cents. If I make a mistake on my payment and leave a balance of one dollar for a month, they will charge me 50 cents in interest.
I don’t think any of this is new. I think the fact that I can easily read it is new, and I can see why the banks and credit companies weren’t happy with the law that got passed. They have to actually admit how they make their money. That’s got to be embarrassing.
Don’t get me wrong. I know banks and credit cards companies are in business to make money. It’s amazing to discover, retroactively, just what they were trying to hide from us for all these years.
Needless to say, I did not enclose my “easy application” in the postage paid envelope. Instead I included a polite note asking if they were the same Citicorp that nearly bankrupted us, since that was the only Citi with which I was familiar, and suggesting that applying for a credit card with them would not be a desirable thing to do. I sent the note back to them, on their 44 cents.