Wednesday, August 2

Reading the fine print...


The fine print on a Citibank "Diamond Preferred Awards" card (American Express):

0% APR on Balance Transfers until September 1, 2007**

**After the promotional period, the standard APR for purchases will be applied to all remaining balance transfer amounts. (As of June 1, 2006, the standard variable APR for purchases: 14.99%; the standard variable APR for cash advances, 22.99%) However, if you are in default under any Card Agreement that you have with us, we may automatically increase the rate on all balances (including any promotional balances) to a variable default rate of 31.99%.

I want to make sure you realize that is not a typo. If you are one day late with a payment on your Amex, they can automatically change your interest rate from zero to thirty-one-point-nine-nine percent per year.

Don't get me started about payday loans.

I realize I'm a year late and several dollars short on the bankruptcy bill, but charging exhorbitant interest is called usury, and last year Congress said it was okay, even though the Bible hates it (something even Rick Santorum didn't bring up), it's bad business, and it's just plain wrong. Just last month three people in Italy were arrested for charging less interest than Citibank does on its "default" customers. But guess what? Citigroup's political action committee gives 71% of their 2006 donations to Republicans. Good investment? Not this year, ma hunnies.

(Great old post on this from Slacktivist.)


  1. It's worse than that. Look at the agreement: "If you are in default under any Card Agreement that you have with us" - and with the consolidation of credit providers, that means that ANY agreement with them could snap credit from 0 to 30 APR.

    Islam (like Christianity and Judaism) forbids usury. There are some very interesting ways that has worked out through the Muslim world...'s worth some googling over (I read all about it a few years back, have no links handy).

  2. Usury?

    I always thought it was called loan sharking.

    My bad.

    BTW, the SF Chron has a daily finace columnist who discusses things like this about once a week. He's hot on identity theft too...especially since he recently became a victim.

    He generally chews a hole right through the old corporate panties (like that reference?). Right entertaining writer too.


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