So I got a letter in the mail from Citi, telling me that they want to offer me a 6 month interest rate decrease to 3.99% on new purchases. I already have a balance of X,XXX dollars on this account. Pretty much every month I pay X amount and charge 1/2X amount. So I am slowly paying the card off, but still charge on it mainly for convenience.
This interest rate is essentially them trying to compete with my other cards, to make sure that I charge purchases with them, right? And to make sure I continue to spend and don't just pay off my card of course. What is the benefit to them, if I don't spend anything more than I would have, and continue to pay it down at the same rate (paying it off in 3 or 4 months). I realize that I will be paying off the lower interest rate debt first, therefore increasing the amount of time I'm paying interest on my current balance, but if I didn't take the 3.99% rate, then I'd pay 12% on all of it, for however long it takes to pay off.
Am I missing something? It sounds like they're not gaining anything, which makes me extremely suspicious.



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