Citibank - taking taxpayer money and sticking it to their customers

I got another letter from Citi (one of the government bailed-out banks if you remember) that my credit card terms had changed. I barely read these, but was shocked when I saw that they were jacking up the interest rate to the loan-shark rate of 29.99%.

I called and asked what was up (maybe a missed a payment or two?) and they said no, given the recent economic times, they needed to raise rates on everyone. But they were giving a 10% rebate on the interest you'd pay, and I could reject the terms and close my account if I liked.

You can be sure these terms will be rejected. Citi has taken taxpayer money to bail it out, is borrowing from the government at close to 0%, and in turn is screwing over their customers. I'm not sure the reason for this--it seems counterproductive, but there must be some grand plan they have.

Even though I don't carry a balance as a rule, I always like a credit card or two as a backup "just in case". So, at 29.99%, what would happen if you did carry a balance with Citi?

Let's look at a hypothetical case of a 20-year-old who is getting married and puts $10,000 on his card for his wedding, then lets the balance build at 29.99% (for simplicity, let's forget about minimum payments for now).

* In just two years and 8 months, this would double to $20,126
* In just 10 years, this would grow to over $137,000
* In 17 years, 7 months he would owe over a million dollars.
* Let's say he carried this on to retirement at 65. He now owes $1.3 BILLION dollars.
* And finally, crushed by a mountain of debt at 78, he dies owing $40 billion, more than the entire current revenues of Citi.

That's what 29.99% does, and that's plain ridiculous.