Citi's APR's not in line with credit rating

Discuss anything related to interest rates & fees, like balance transfer offers, low rate cards, annual fees, etc.
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Fastphilly
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Citi's APR's not in line with credit rating

Postby Fastphilly » Thu Feb 19, 2015 6:48 pm

I just got approved for the Citi Double Cash card earlier this week (applied online) with a stating CL of $6,600.

What surprised me though was the APR 20.99%.

I checked my EQ fico score and it was 785. They pulled EX and my fico score was 741. My AAoA is 9.9 years with no inquiries over the last two years.

I don't know if my high balance on my SMCU (10K on a 15K credit line) had something to do with it. My Chase Freedom is at 0 balance so my total uti was 50%. I think now I should have waited for my tax return payment to report before taking this card to lower the uti.

I have paid off numerous car and installment loans over the last 10+ years (never late on any of them). Currently all my car/installment loans have been paid off as of June of 2014.

I just find it hard to believe that a 10K balance on a credit card with a income of 85K per year warrants a borderline loan shark rate for my excellent credit history.

Yes this card will be a daily spender and PIF every month so the APR won't effect me but it's the principal of the thing.

Has anybody with good credit been jammed with a high APR from Citi recently?
In Wallet:
SM Credit Union Platinum Visa 15K (opened 2004)
Citi Double Cash MasterCard 6.6K (opened 2015)
Chase Freedom Visa 5K (2009) (morphed from Providian/Wa Mu)


Brad Bishop
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Postby Brad Bishop » Thu Feb 19, 2015 6:50 pm

I think that the argument is simple:

If 20.99% is too high for you then just cancel the card.

If it's not too high, based on your circumstances, then keep the card.

Me? I'd cancel it. I'm not paying over 10.99APR for a credit card.

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PlyrStar93
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Postby PlyrStar93 » Thu Feb 19, 2015 7:55 pm

Citi's prequalifier gave me 22.99% for the rewards cards. So long as I pay balances in full, that's not going to hurt me anyways, but it does look very ugly, which can be uncomfortable.

I would just regard that as they already know I pay all the balances in full each month, which means they can hardly earn interest from me. Should I ever have to pay interest, they will have to use a high rate to earn more profit, since they have figured out I may only have a small amount carried over should I ever carry balance at all.
Citi Forward Visa $5000 10/2012 | American Express Blue Cash Everyday $8000 2/2014 | Discover it $7000 5/2014
Chase Freedom Visa Signature $7000 6/2014 | Citi ThankYou Premier Visa Signature $5000 1/2015
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Fastphilly
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Postby Fastphilly » Thu Feb 19, 2015 9:09 pm

Brad Bishop wrote:I think that the argument is simple:

If 20.99% is too high for you then just cancel the card.

If it's not too high, based on your circumstances, then keep the card.

Me? I'd cancel it. I'm not paying over 10.99APR for a credit card.


That's the sticky point. It's nearly impossible to find a credit card paying out 2% or more in rewards with a sub 10.99APR. My Credit Union card I earn 1 point for every dollar spent towards rewards (airfare, hotel or merchandise from their rewards website) with a fixed 9.9% APR but now I'm looking for a better rewards program since I'm in aggressive payoff mode on that CU card and I prefer cash back so I'll have to deal with it. There is no way on God's green Earth I'm leaving a revolving balance on a card that high. Reminds me of the old Providian days with that kind of APR LOL!!!
In Wallet:
SM Credit Union Platinum Visa 15K (opened 2004)
Citi Double Cash MasterCard 6.6K (opened 2015)
Chase Freedom Visa 5K (2009) (morphed from Providian/Wa Mu)

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CarefulBuilder14
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Postby CarefulBuilder14 » Thu Feb 19, 2015 10:44 pm

Fastphilly wrote:That's the sticky point. It's nearly impossible to find a credit card paying out 2% or more in rewards with a sub 10.99APR. My Credit Union card I earn 1 point for every dollar spent towards rewards (airfare, hotel or merchandise from their rewards website) with a fixed 9.9% APR but now I'm looking for a better rewards program since I'm in aggressive payoff mode on that CU card and I prefer cash back so I'll have to deal with it. There is no way on God's green Earth I'm leaving a revolving balance on a card that high. Reminds me of the old Providian days with that kind of APR LOL!!!


No one who could avoid it would pay even a moderately high APR. So if someone is going to pay them interest, anyway, why not charge a very high APR?

Rewards should really just be an afterthought for people who PIF - or at least don't pay interest.

If I was paying 9.9% interest on $10k, I would focus on doing a no-fee, 0% balance transfer before I thought about more cash back.

Your APR does sound high for someone with your long history, but your utilization is also quite high.

And it's pretty common for cards with great rewards to have bad APRs. I've averaged 4.5% cash back on my Sallie Mae (not counting the small signup bonus) but Barclaycard is still planning on having my 0% jump to 22.99% after the first year.
Very useful: SchwabPlat, CSP, IHG, Costco (was AA Plat), Freedom, SPG, Prestige (retention)
Somewhat useful: Discover, ED (was EDP), BCE, Hyatt
SD with activity alerts, might close: Arrival

Might add: Proper business card, CSR, Ritz, Delta Gold, First Tech, BofA Travel PH, Aviator Red

Fastphilly
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Postby Fastphilly » Fri Feb 20, 2015 12:06 am

CarefulBuilder14 wrote:No one who could avoid it would pay even a moderately high APR. So if someone is going to pay them interest, anyway, why not charge a very high APR?

Rewards should really just be an afterthought for people who PIF - or at least don't pay interest.

If I was paying 9.9% interest on $10k, I would focus on doing a no-fee, 0% balance transfer before I thought about more cash back.

Your APR does sound high for someone with your long history, but your utilization is also quite high.

And it's pretty common for cards with great rewards to have bad APRs. I've averaged 4.5% cash back on my Sallie Mae (not counting the small signup bonus) but Barclaycard is still planning on having my 0% jump to 22.99% after the first year.


Thanks for the advice, my current balance is now $5,700 due to a large payment (tax return plus wages earned). I plan to have this card paid off by the end of May. The reason I don't take the 0% intro offer on transfers to my new Citi card is the 3% fee on balance transfers. After doing the math I'd pay more on the transfer fee $170 than paying interest on the 9.9% CU card. I've figured paying it down $1,800 per month until May would be less money wasted than the transfer fee. It's not substantial but it is money saved. Besides transferring $5,700 to a card that has a $6,600 credit line would put my uti on the Citi card at over 80%. No thanks!
In Wallet:
SM Credit Union Platinum Visa 15K (opened 2004)
Citi Double Cash MasterCard 6.6K (opened 2015)
Chase Freedom Visa 5K (2009) (morphed from Providian/Wa Mu)

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CarefulBuilder14
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Postby CarefulBuilder14 » Fri Feb 20, 2015 12:18 am

Fastphilly wrote:Thanks for the advice, my current balance is now $5,700 due to a large payment (tax return plus wages earned). I plan to have this card paid off by the end of May. The reason I don't take the 0% intro offer on transfers to my new Citi card is the 3% fee on balance transfers. After doing the math I'd pay more on the transfer fee $170 than paying interest on the 9.9% CU card. I've figured paying it down $1,800 per month until May would be less money wasted than the transfer fee. It's not substantial but it is money saved. Besides transferring $5,700 to a card that has a $6,600 credit line would put my uti on the Citi card at over 80%. No thanks!


Citi would charge you a fee to do a BT, yes - but there are cards that don't charge that fee.

It sounds like you've got enough accounts to track for now, though, and will pay it off quickly, anyway.
Very useful: SchwabPlat, CSP, IHG, Costco (was AA Plat), Freedom, SPG, Prestige (retention)
Somewhat useful: Discover, ED (was EDP), BCE, Hyatt
SD with activity alerts, might close: Arrival

Might add: Proper business card, CSR, Ritz, Delta Gold, First Tech, BofA Travel PH, Aviator Red

Fastphilly
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Postby Fastphilly » Fri Feb 20, 2015 1:22 am

CarefulBuilder14 wrote:Citi would charge you a fee to do a BT, yes - but there are cards that don't charge that fee.

It sounds like you've got enough accounts to track for now, though, and will pay it off quickly, anyway.


It would be nice to app for another card with a no fee 0% transfer promo, but I don't want to lower my score by having another inquiry so soon after just getting this Citi card. For a period of over ten years I have had the same two cards (the Chase Freedom was once a Wa Mu card and before that a Providian) and my Credit Union Visa. I'm planning on taking out a personal unsecured loan from my Credit Union (they charge me 9.9%) later this year so I'm holding off on any inquiries until that time. Then I will shop hunt after the loan approval for a really good intro offer on a new card.
In Wallet:
SM Credit Union Platinum Visa 15K (opened 2004)
Citi Double Cash MasterCard 6.6K (opened 2015)
Chase Freedom Visa 5K (2009) (morphed from Providian/Wa Mu)

takeshi
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Postby takeshi » Fri Feb 20, 2015 8:58 am

Fastphilly wrote:I just find it hard to believe that a 10K balance on a credit card with a income of 85K per year warrants a borderline loan shark rate for my excellent credit history.

It's not just a matter of your score or balance versus income.

10K/15K is 67% utilization which is very high. General advice is do not exceed 30%. Utilization is a significant risk factor and both individual and overall matter.

As always, for best results apply when your reports are in best shape. In this context you should have applied when that card's utilization was significantly dropped on your reports.

Try requesting an APR reduction when your utilization drops and is reported.

kdm31091
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Postby kdm31091 » Sat Feb 21, 2015 6:57 pm

Citi is giving high APRs on the Double Cash in general for the most part



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