Credit Card Offers - Is It Me or Are Some Credit Card Companies Crazy?

R. Lee Barnes
FirstCredit.Net

So you get a pre-approved credit card offer in the mail from some credit card company. The offer states that

Credit Card Offers

you are pre approved for a Gold card. Simply accept the offer and you will receive your card in a few days. But wait! There’s more. Act now and you will only have to pay a $29 dollar set up fee, a $95 program fee, a $48 annual fee, and a monthly servicing fee of $84 annually! Really act now, and we’ll throw in an annually percentage rate of 79.9% just for you. That’s right only 79.9 Percent!!! You so need this credit card. Be sure to really, really act now while we are still in business.

Sound crazy to you? Well this is a true story, kinda. Customers of First Premier Bank of Sioux Falls, SD have reported getting pre-approved credit card offers in the mail with rates similar to the rates above. I understand that some credit card companies wanted to raise rates ahead of the new credit card laws which took effect in Feb 2010, but WTF? This company seems to have lost its damn mind! As if the fees weren’t crazy enough (if your credit limit was $250 you’d get your card with $71 of credit because of the fees) they really win you over with the 79% interest rate. This particular example offer is for people with “less than perfect” credit. With offers like this, I’m not exactly sure how you’d ever get perfect.

How about this one? You get a credit card offer in the mail that states you’ll earn cash back on everything. You’ll get a full 1% cash back on all purchases, and 0% APR on balance transfers with no annual fee. Are you interested? Please don’t mind the fact that we just raised interest rates on many of our longtime loyal customers with excellent credit. Though some of these folks have been good on-time paying customers for over 20 years, in some cases we raised their rates from 9.9 percent to 30 percent so that we could make more money after the new credit card laws take effect. We may also rescind the no annual fee offer and require you to pay as much as 90$ per year for your card. So apply now! We really need your help to pay our top executives ridiculous bonuses so that we may keep in pace with the rest of the ridiculous banking sector bonuses you may have heard about in the news. You see our top three executives will need a total of nearly 12.5 million in cash bonuses. We also have at least 15 other Citi executives who will need multimillion-dollar payouts as well. So don’t mind our rate hikes, send what you can because we really need your help. We may even consider implementing a mansion-less executive fund for some of our less fortunate executives.

Sound crazy to you? Well this too is a true story, kinda. Ok, I made up the part about the mansion-less executive fund for less fortunate executives, but the rest is true. So is it me or has Citibank has lost its mind? If the above actions aren’t bad enough, to avoid greater regulation Citibank even promised congress and it’s customers it would not reserve the right to raise rates at any time for any reason. Of course this promise was made right before they raised rates on their customers.

So I ask you again, is it me or are some of these credit card companies crazy?

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