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Author: TMFJeanie Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308782  
Subject: APR 36%??? Date: 6/16/2008 1:56 PM
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Today I decided to actually look at the bottom of my Citi card statement, the part that lists the interest rates for standard purchases vs. cash advances, etc.

And I nearly fell over when I saw this listed for standard purchases:

Nominal APR: 15.990% <------what does "nominal" mean?
Annual APR: 36.000%

The interest rate for cash advances is 19.90% (which I've never used, but would expect to be a higher rate than for standard purchases.)

So... my question is about the Annual APR of 36%. A rate that high would indicate a customer with a lousy payment history and/or a very low FICO score.

Yet I have a spotless record since 1983 with this particular card, and never carry a balance on it (or any other CC), paying them all in full each month well before their due dates. And my FICO score is in the mid-800's.

So what gives? Obviously I'm going to have to call them to ask, but am curious what you Fools think is going on here.

Thanks,


Jeanie
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Author: TchrP Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 274172 of 308782
Subject: Re: APR 36%??? Date: 6/16/2008 2:27 PM
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!!!

I looked online at one of my Citi statements. Here's what it says:



Periodic Rate Nominal APR ANNUAL
PERCENTAGE
RATE
PURCHASES
Standard Purch 0.04107%(D) 14.990% 14.990%
ADVANCES
Standard Adv 0.05477%(D) 19.990% 19.990%


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Author: CPAScott Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 274173 of 308782
Subject: Re: APR 36%??? Date: 6/16/2008 2:40 PM
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Nominal APR: 15.990% <------what does "nominal" mean?


The nominal interest rate is the rate without considering the impact of compounding.

I believe the 36% assumes that you don't pay the debt. Over the course of the base period (one year), the effective rate would be 36%. The actual calculations are dependent on how Citi calculates interest and the impact of required payments.


CPAScott

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Author: kaellner Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 274175 of 308782
Subject: Re: APR 36%??? Date: 6/16/2008 2:48 PM
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I liked one statement I got after a BT, the fees made the APR over 300%. Being charged a fee for a week caused the distortion.

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Author: LaughingRaven Big red star, 1000 posts 10+ Year Anniversary! Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 274176 of 308782
Subject: Re: APR 36%??? Date: 6/16/2008 2:56 PM
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Nominal APR: 15.990% <------what does "nominal" mean?
Annual APR: 36.000%


Did you do a balance transfer or incur an annual fee during the statement period? A 3% fee, annualized out over a year, would be approx. 36%. I can't think of a situation in which that 15.99% APR could translate into 36% annually, no matter how quickly they compound it.

--
Raven

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Author: TMFJeanie Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 274184 of 308782
Subject: Re: APR 36%??? Date: 6/16/2008 5:36 PM
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Did you do a balance transfer or incur an annual fee during the statement period? A 3% fee, annualized out over a year, would be approx. 36%. I can't think of a situation in which that 15.99% APR could translate into 36% annually, no matter how quickly they compound it.


Nope. No balance transfers; it's a no-fee card; no interest has been imposed since I pay in full. The only thing at all different lately is that I'm carrying a credit balance due to a large credit that didn't get posted until after last month's cutoff date.

Guess I have to call them <sigh> as soon as I can get up the strength to waste 25 minutes or so listening to pre-recorded, "your call is important... blah blah"


Jeanie

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Author: TMFJeanie Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 274189 of 308782
Subject: Re: APR 36%??? Date: 6/16/2008 6:12 PM
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Being charged a fee for a week caused the distortion.

Well, I called them and that was fun.
The CSR had a very difficult time explaining that my *real* APR was 15.99% and not 36%. When pressed, she glossed over how "it was calculated on average daily balance...." but she didn't sound convinced herself. She kept saying, in effect, pay no attention to that 36%.

When she realized I wasn't buying her non-answer, she put me on hold and obviously had someone explain it to her. During that billing period, among all my other charges, there was $16.19 in Foreign Transaction Fees. We spent the month in Mexico and used that card a lot.

So... apparently "foreign transaction fees" are not treated as Standard Purchases, but the same as a cash advance, so it distorts the APR for that month.

The 36% APR will disappear by next month's statement and the 15.99% remains as my interest rate. At which point I said, "yeah... what's up with that? 15.99% seems rather high for a good customer, don't you think?"

At which point she said, I'm going to lower that rate to 12.99% right now.

Hee hee. Not that they'll ever see a penny of interest from me, but it felt good all the same ;-)


Jeanie

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Author: Minxie Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 274192 of 308782
Subject: Re: APR 36%??? Date: 6/16/2008 7:26 PM
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Just so you know, I haven't been with Citi nearly as long as you and my rate is 6.9% for purchases. You might want to keep calling them.


PURCHASES
Standard Purch $0.00 0.01890%(D) 6.900% 6.900%
ADVANCES
Standard Adv $0.00 0.05477%(D) 19.990% 19.990%


Minxie

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Author: TMFJeanie Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 274193 of 308782
Subject: Re: APR 36%??? Date: 6/16/2008 8:05 PM
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Just so you know, I haven't been with Citi nearly as long as you and my rate is 6.9% for purchases.

Wow that is a great rate. Minxie. Maybe I should call them back and hint that maybe if they gave me such a good rate I'd stop being a "deadbeat" and begin carrying a balance ;-)

(Love knowing CC companies refer to folks like me as deadbeats)


Jeanie

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Author: AlisonWonderland Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 274194 of 308782
Subject: Re: APR 36%??? Date: 6/16/2008 8:11 PM
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(Love knowing CC companies refer to folks like me as deadbeats)

I recently called one of the companies about one of my cards -- perhaps due to some fraudulent charges -- and of course, they wanted to sign me up for all sorts of "services," all of which I declined.

The CSR laughed, though, when I called myself a deadbeat.

~~ Alison

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Author: Minxie Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 274195 of 308782
Subject: Re: APR 36%??? Date: 6/16/2008 8:18 PM
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Wow that is a great rate. Minxie.

Yeah, they keep lowering it without me calling. It's weird.

Maybe I should call them back and hint that maybe if they gave me such a good rate I'd stop being a "deadbeat" and begin carrying a balance ;-)


I don't know; I don't carry a balance on it but I do funnel all of my daily expenses through it. It is my UPromise card and gives me a 1% rebate toward my son's 529 account, so the effective rate is really 5.9% (or would be if I carried a balance.)

I just mentioned it so you would have anecdotal evidence to throw at the CSR. They always tell me stuff like, "12% is our very best rate" when I know dog-gone-well other people have lower rates.

Minxie

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Author: bill343 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 274197 of 308782
Subject: Re: APR 36%??? Date: 6/16/2008 9:25 PM
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I was looking at Bankrate ( or Creditcard) recently, just to see what was out there as far as CC deals and such. Amazing the variation within the same company for the various imaginatively named cards. And, there is no "Free" anything. Cashback and such rates were all a percent or so higher than cards without such "benefits". TANSTAAFCC.
Bill

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Author: Minxie Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 274198 of 308782
Subject: Re: APR 36%??? Date: 6/16/2008 10:31 PM
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"TANSTAAFCC"?

Minxie

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Author: NaggingFool Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 274199 of 308782
Subject: Re: APR 36%??? Date: 6/16/2008 11:13 PM
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< "TANSTAAFCC"?

There ain't no such thing as a free credit card.

(A variant of "there ain't no such thing as a free lunch.")

- Megan

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Author: dcoop46 Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 274202 of 308782
Subject: Re: APR 36%??? Date: 6/17/2008 7:22 AM
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This post made me wonder what rate I have and it is at 12.99%. I have always been a good customer and I would of thought my rate would be lower. But then again I have never had an outstanding balance. (I don't plan on starting one now)

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Author: Minxie Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 274236 of 308782
Subject: Re: APR 36%??? Date: 6/17/2008 4:33 PM
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< "TANSTAAFCC"?

There ain't no such thing as a free credit card.

(A variant of "there ain't no such thing as a free lunch.")

- Megan


Ah...thanks for the info!

Minxie

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Author: llamalluv Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 274786 of 308782
Subject: Re: APR 36%??? Date: 7/1/2008 5:12 PM
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Me, too. I've got a $4900 balance on a Citibank card that I'm snowballing, and I pay 7.96%.

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