Citigroup Considers Repealing a Pledge (no universal default), and the Slogan With It

[Newsjock]

Source: New York Times

Last year Citigroup made a promise to millions of people who flex its credit cards: “A deal is a deal.” The slogan was used to trumpet an announcement that the financial giant would no longer reserve the right to raise interest rates on cards at any time, for any reason.

But Citigroup’s deal is only a deal until it isn’t. The company is quietly reconsidering its pledge as it confronts a host of financial troubles, according to Citigroup executives. A decision could come this week. Samuel Wang, a spokesman for Citigroup, declined to comment.

Several Citigroup executives emphasized the “deal is a deal” slogan before members of Congress and to consumer groups. The pledge helped Citigroup fend off greater regulation of the card industry and distinguished the company as an industry leader.

... But now Citigroup, with the entire financial industry, is struggling to shore up its finances. The company has taken more than $40 billion in write-offs during the last year, largely because of investments linked to mortgages. The credit card business, meantime, is starting to stumble because of the slack economy. Americans are falling behind on card bills in growing numbers. And after years of staving off federal banking regulators and Congress, credit card lenders are facing tough new rules that are intended to protect consumers but would also limit the money they could make from customers deemed bigger risks.

Read more: http://www.nytimes.com/2008/06/25/business/media/25adco.html?ex=1372132800&en=6d193af144387f30&ei=5124&partner=permalink&exprod=permalink

[pattmarty]

1. We have to get control again over the financial industry.......

.........these people put the Mafia "juice loans" out of business, they couldn't compete anymore.

[Indenturedebtor]

2. Seriously that's exactly what they are.

If you even think about not paying a credit card company they ruin your life for a decade.

[Cronus Protagonist]

3. Freedom's just another word for nothing left to lose

I passed that line a few months back. Now they can ALL go fuck theirselves.

[Indenturedebtor]

4. We're doing everythng we can to get rid of our CC debt

That stuff is like a pair of leg irons.

[Cronus Protagonist]

7. My plan now is to default on everything and get judgements

Paying off a judgement is easy, no interest, and amount is within your means. Paying off a card that's charging 24% interest is almost impossible when you can't pay much more than the minimum monthly payment.

My plan is to default on everything. Some will write off the debt... waaahhhhooooo! Some will obtain judgements, with time to pay and no interest. I don't see any downside now that my credit rating is already fucked.

[Indenturedebtor]

8. Yeah if your credit is already crap then why not. Unfortunately though...

Alot of companies are using credit reports to decide whether or not to hire you! How messed up is that? If you don't pay your bills the CC companies do everything they can to ruin your life. Evil bastards.

[Cronus Protagonist]

9. True, and being self-employed helps me a little in that respect

Although the reason I have difficulty affording anything now is due to my clients not paying me, or not paying me on time.... shit trickles downstream and before I used to be the one cleaning up the mess, now I just pass it on.

[Indenturedebtor]

10. I think I remember you posting about that awhile back.

Do you think that consolidation might be a better option?

[Cronus Protagonist]

11. My credit is already done...

Debt consolidation won't make it better, and why bother when there's nothing to gain? hahaha... freedom's just another word for nothing left to lose :)

[Indenturedebtor]

12. Well then to hell with them :D n/t

[pattmarty]

5. Yeah, I know. I was being facetious, but it's not funny at all..........

.........I have never had a credit card in my life (61 yo), although I have purchased a lot of shit (like everyone else) on "time". I am now retired and don't have a whole lot of money, but I have a modest home (almost paid for, and no, I didn't get caught up in "borrowing against"), 8 yr old modest vehicle, a pop up camper (used 1991). This is the kinda of shit "they" don't teach in school AND SHOULD.

[Indenturedebtor]

6. It's true they really don't teach you about that

But things have changed in the last 30 years. Wages have not kept pace with inflation since the 70's, but the availability of credit has skyrocketed. That's how they were able to do it. Businesses wouldn't have sold anything without consumer debt, unless businesses on the whole were forced to raise wages.

I don't live an extravagant lifestyle and my wife and I have pretty good jobs but one little unexpected expense and we're using the cards again.