Citibank is back asking for another 125 billion in taxpayer bailouts. No one is even sure how many billions they have already availed themselves of, but we do know the mismanagement and corruption hasn’t slowed a bit.
This week, I received two notices from Citibank on the two small accounts I have with them. After about six years of making my payments on time, making far more than minimum monthly payments and never being late…not even once!….I was told that my interest rate of 10.19% was being jacked up to 29.99%.
I closed my accounts immediately and have decided that due to predatory lending practices exhibited by Citibank, which our illustrious congress failed to address, I am left with no choice but filing bankruptcy.
According to my friend Dan Martin, one of the few people I know who understands how the financial system works, if I attempted to pay off a thousand dollar card using the minimum monthly payment the debt could never be repaid. Dan says it goes like this:
$20 per month will never pay off $1,000 at 29.99%.
To retire this in 20 years would require a payment of $25.06.
10 years, $26.36.
5 years, $32.35
And about those fuzzy interest rates….
For example: $1,000 paid down to zero in 12 equal monthly payments would require a payment of $97.48. Total interest paid over the year would be $169.79. As a percentage of the $1,000 this would be 16.979%. As a percentage of the “average” outstanding balance (median is $536.96) this would be 31.62%.
The 31.62% figure is probably the closest to the APR (annual percentage rate.)
$2,162.53 interest would be paid over a ten year loan. As a percentage of the $1,000 this would be 18.021%. As a percentage of the “average” outstanding balance (median is $814.73) this would be 22.119%.
The 22.119% figure is probably the closest to the APR (annual percentage rate.)
Each day there are media spokespersons railing about our credit scores, how to increase them how to protect them and the travails which will accompany either no credit score, or a “bad” credit score. We are encouraged through constant advertising to get copies of free credit reports and are cautioned about how really bad our lives will be if we don’t launch ourselves into predatory debt and have this number attached to our names supposedly defining who we are.
Your credit score is an artificially created number, and only useful to the same companies who created it. It has no relevant or evident meaning and is affected by information many times that is neither factual nor correct. Why we have allowed ourselves to become enslaved to this fictitious number that represents nothing, is beyond me.
Here’s the problem: The same companies many times, who generate these bogus numbers are the same ones who are in the tank and spending taxpayer money to cover the losses they themselves caused. Did anyone bother to check their credit scores?
It seems obvious to me that a credit score isn’t as important as we were led to believe. It surely has had no bearing on the ability of Citibank and other financial parasites to obtain massive loans based on the very criteria used to deny us common folk a loan, or a credit card or to charge predatory interest rates.
It seems bad judgment, failure to invest wisely or to save for future needs didn’t affect Citibank’s credit score or its ability to secure massive loans with toxic debts used as collateral. Congress just couldn’t move fast enough to hand major wads of cash over to the same companies and individuals who had bankrupted their own companies and whose credit scores had to have been in the minus category.
I believe Citibank and others like them should be charged the same predatory rates of interest subject to [universal default] on all the TARP funds. Once they miss a payment or are late on even one …..we’ll just raise the rate across the board on all the loans.
So Citibank……What’s in YOUR wallet……besides piles of taxpayers cash? I bet you aren’t carrying your own card; you couldn’t afford to.
© 2009 Marti Oakley