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An Open Letter to My 18 y/o Nephew

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Here is the the agreement I found online for your card: My comments are in black. The comments in red explain how I believe the contract should be worded and what it means in principle.

Please read these Terms and Conditions.

Please note that the Terms and Conditions for the Citi® Dividend Platinum Select® MasterCard® account will be provided to you electronically.

This means that the following agreement is NOT the contract in effect. The one in effect is the one emailed to you. You must now find the agreement they sent to you electronically and compare it with this one.


Annual percentage rate (APR) for purchases


Our published rate is meaningless since our rates can change with every billing cycle, or because of things in your life that have nothing to do with us, like losing your job, or because we've been unusually successful in our ongoing attempts to bribe congress, or because our competition is doing better that we are and we need to catch up. In short, there isn't and never will be a way for you to predict the future cost of being in debt to us. Don't bother asking. We exist to make you think you can borrow money to buy the things you want. We make money because it is psychologically easier for you to "charge it" than it is for you to spend the cash in your pocket hence you are likely to spend more. Once we have you in the position of having spent more than you can repay within the next 20 days or so, we can make the interest rate much higher so that you'll never get the chance to pay off your debt, simply more interest on it. This is our mission. We study everything you do comparing it to everyone else to find out what is most likely to tempt you to spend more than you can afford. Needless to say, we're looking very forward to doing business with you!

Other APRs

Balance transfer APR: As long as first balance transfer is completed within 12 months from date of account opening, 0.00% for 12 months from date of first balance transfer. After that, 9.74%.

Cash advance APR: 19.99%.

Default rate: 28.74%. See explanation below.*

The interest rate we charge will always be ludicrously high and will almost certainly go even higher before you can repay us. We make money by having lots of different kinds of debtors, from those who almost never pay to those who never fail to pay. If all our debtors were similar it would be difficult for us to make money. This is why, sad as it may seem to your small minds, we must constantly looks for ways to increase the amount of debt you will be carrying with us to create a nice healthy spectrum of different debt qualities that we can repackage and resell to investors looking for that various levels of risk and return.

Variable rate information

Your APRs may vary. The rate for purchases and balance transfers is determined for each billing period by adding 4.99% to the U.S. Prime Rate .The U.S. Prime Rate used to determine your APRs for each billing period is the U.S. Prime Rate published in The Wall Street Journal two business days prior to the Statement/Closing Date for that billing period. The cash advance rate is determined for each billing period by adding 14.99% to the U.S. Prime Rate, but such cash advance rate will never be lower than 19.99%. The default rate is determined for each billing period by adding up to 23.99% to the U.S. Prime Rate. Factors considered in determining your default rate may include the length of time your account with us has been open, the existence, seriousness and timing of defaults under any Card Agreement that you have with us, and other indications of usage and performance.

The interest rate we will charge you is for any money you borrow is whatever we want it to be and is guaranteed to be many times higher than the maximum any sane person would ever pay for borrowed money.

Grace period for repayment of balances for purchases

Not less than 20 days if you pay your total new balance in full each billing period by the due date.

If you have any balance of any kind (like charges, cash advances, or balance transfers), then interest begins accruing, at our mafia grade rates, IMMEDIATELY on all new charges. This means you should not use your card at all if you don't want to waste the benefit of any kind of promotional offer we extend to you and pay us for that privilege to boot.

Method of computing the balance for purchases

Average daily balance (including new purchases)

Annual fees


Minimum finance charge


Transaction fee for cash advances:

3% of the amount of each cash advance, but not less than $5.

Never ever use this card to obtain cash unless you are doing so under a special offer where these rates do not apply

Transaction fee for balance transfers:

3% of the amount of each balance transfer, but not less than $5 or more than $50. However, there is no fee with the balance transfer APR offer described above.

Never ever use this card to transfer debt from other creditors unless you are doing so under a special offer where these rates do not apply and have already agreed to pay all of the debts you are transferring.

Late fee:

$15 on balances up to $100; $29 on balances of $100 up to $1000; and $39 on balances of $1000 and over.

If anything gets in the way of our being paid on time, from delays at the post office to our own inefficiency or error, we will do our best to make you regret the day you were born.

Over the credit-line fee:


If anything at all causes the total amount you owe us to exceed the maximum amount we have agreed to lend you, we will add another $35 to your debt to us. We will signal every other creditor you have that it's now the right time to raise your interest rates to the maximum the law allows. We will do anything else we can think of in the future to ensure you'll be in debt to us for the rest of your life.

In summary, paying late, going over the limit, pay the minimum for "too long," any material change to your income, and how our in house psychics rate your future ability to pay us, are all signals that we have landed one and should begin reeling wildly. Rest assured we'll do everything in our power to hook you into debt servicing for as long as possible. This is a fiscal responsibility to our shareholders.

All account rates, fees and other cost information disclosed above are accurate as of October 3, 2004, but are subject to change in accordance with applicable law and the Card Agreement that will be sent with your card. To find out what may have changed after that date, write to us at Citibank, P.O. Box 6116, Sioux Falls, SD 57117-6116.

At any time we wish, we may raise your rates to the maximum amount permitted by the laws our industry can bribe congress to pass. Furthermore, we will encourage every other creditor you have to do the same.


We allocate your payments and credits to pay off low APR balances before paying off higher APR balances. That means your savings will be reduced by making transactions that are subject to higher APRs.

We will always interpret your debt to us in whatever way allows us to charge you the most interest. Furthermore, we spend a large chunk of the money we make looking for new ways to convince you long term debt is nothing to fear.


• This offer is only valid for new accounts. You must be at least 18 years of age. If you are married, you may apply for a separate account. Citibank (South Dakota), N.A. ("we" or "us") is the issuer of your account.

• Federal law requires us to obtain, verify, and record information that identifies each person who opens an account, in order to help the government fight the funding of terrorism and money laundering activities. To process the application, we must have your name, street address, date of birth, and other identifying information, and we may ask for identifying documents from you as well.

• To process the application for a new account, it must be:

1. Accurately completed

2. Verifiably correct

3. Some offers are for a limited time. If you are responding to a limited time offer, we must receive your application by the expiration date.

• Please allow four weeks from date of submission to process a completed application.

• We may gather information about you, including from your employer, your bank, credit bureaus, and others, to verify your identity and determine your eligibility for credit, renewal of credit, and future extensions of credit. If you ask us, we will tell you whether or not we requested a credit bureau report and the names and addresses of any credit bureaus that provided us with such reports.

• To receive a Citi® Dividend Platinum Select® MasterCard®, you must have an annual income of at least $12000 and you must meet our credit qualification criteria. Your credit limit will be determined by your yearly income and a review of your credit report. You will be informed of the amount of your credit line when you receive your card. Some credit lines may be as low as $500. Please note that cash advances may be limited to a portion of your credit line.

• If you are approved for credit, you will receive a Card Agreement ("Agreement") with your card. Read it carefully for important information regarding your account. The Agreement will be binding on you unless you cancel your account within 30 days after receiving your card and you have not used or authorized use of your account. We may change the Agreement at any time in accordance with applicable law and the terms of the Agreement.

We are working with the federal government, statisticians, and the marketing industry to establish the most efficient tools for the most complete and total invasion of your privacy that our technology and cleverness allows. We keep track of everything you consume, everywhere you go, and anything else we can find out about you. We study this information relentlessly looking for ways to get you to spend more than you should and end up in debt to us. We sell this information to others looking to do the same. In short, you are the sheep, we are the shepherds. We live to tend you. Credit cards replace legal tender. We are your leaders. Deal with it you pathetic peons.




Just follow these simple steps to start saving money on your high-interest cards.

• After receiving your card, you may call our customer service number in order to transfer your high rate balances.

• You may transfer any amount as long as the total amount (including any balance transfer fee) does not exceed your available credit line. Be sure you do not transfer the amount of any disputed purchase or other charge, because you may lose your dispute rights. Also, continue to make payments on your other accounts until your balance transfer is processed.

• The available credit line for your new card will be reduced by the total amount of the transfers we approve. We may not approve future balance transfers if you default under any Card Agreement.

• Watch for payments to show up as credits on your other credit card statements. If the credited amount brings the balance down to zero, you may then cancel those accounts.

• Finance charges will be assessed on balance transfers from the date the transaction is posted to your account.

These rules are designed to ensure that the loss we take giving you a lower temporary rate is more than made up for by things like insurance savings, hidden fees, and the huge benefit of potentially being able to lure you into greater overall debt by giving you the illusion that debt can be easily managed.


• Your Citi Dividend Card account ("Card Account") will receive a rebate based upon eligible transactions appearing on your current month's billing statement. Such eligible transactions include purchases, cash advances and balance transfers, which will show cumulatively on your statement as "Dividend Dollars", as long as your Card Account is open and current. (Rebates on cash advances and balance transfers may take up to three billing cycles before they appear on your billing statement.) However, if your Card Account is no longer current, you will not be able to earn or redeem Dividend Dollars. If your Card Account is closed, you will no longer be able to earn or redeem your Dividend Dollars and unless you reopen your Card Account within 90 days of closure, you will forfeit any accumulated Dividend Dollars.

• You will earn 5% on purchases made at supermarkets, drugstores and gas stations and 1% on all other purchases. Supermarkets are defined as stand–alone merchants that primarily sell a complete line of food merchandise for home consumption. Drugstores are stand–alone merchants that primarily sell prescription and proprietary drugs and nonprescription (over–the–counter) medicines. Gas stations are merchants that primarily sell vehicle fuel for consumer use.

• Purchases not eligible to receive the 5% rebate include, but are not limited to, purchases made at warehouse clubs, discount stores, department stores and convenience stores. In addition, online, catalog, mail order and telephone purchases are not eligible to receive a 5% rebate unless the merchants identify the transactions as being made at a supermarket, drugstore or gas station. We do not determine whether merchants correctly identify and bill transactions as being made at a supermarket, drug store or gas station. However, we do reserve the right to determine which purchases qualify for the 5% rebate.

• You will earn 1% on cash advances and cash convenience check amounts billed at the standard cash advance rate. Cash advances and cash convenience checks billed at a promotional rate will not receive a rebate unless specified otherwise. You will receive five Dividend Dollars for each individual balance transfer transaction, including individual balance transfer transactions made with balance transfer checks of $1,500 and greater.

The only way you can earn dividend dollars on cash advances and balance transfers is by agreeing to pay us interest that amounts to many times what your dividend would be. This effectively means there is no way to save or earn dividend dollars via these two mechanisms. Only via purchases.

• You may accumulate a maximum of 300 Dividend Dollars in any calendar year (eligible transactions appearing on your January – December billing statements). Dividend Dollars earned on purchases through the Citi Dividend Merchant Network are not subject to the $300 calendar year maximum accumulation.

• Citi Dividend cardmembers must be registered for Account Online and must activate their Citi Dividend Merchant Network account to be eligible to earn Dividend Dollars on purchases made through the Citi Dividend Merchant Network.

• As soon as you've earned 50 Dividend Dollars or more, call us at 1–866–676–4672 or visit www.citicards.com so that we may send you a check for the total accumulated Dividend Dollar amount shown on your monthly billing statement. We cannot issue you a check unless you contact us. Checks cannot be issued for amounts less than $50 unless you've already received checks totaling more than $250. Cardmembers must be registered for Account Online in order to request a check at www.citicards.com.

• Returned purchases, disputed or unauthorized/fraudulent transactions, finance charges, and Card Account fees do not earn a rebate unless otherwise specified.

• You are responsible for any taxes that may be due on checks we may send you for your Dividend Dollar balances. Dividend Dollars have no cash value until such time as you may request and receive a check for your accumulated Dividend Dollars and you shall have no property rights or other legal interest in Dividend Dollars. You may not assign, transfer or pledge your Dividend Dollars.

• We may revise any of these Citi Dividend Card Terms and Conditions at any time with 30 days prior written notice.

In short, doing business with us is like picking up nickels in front of steam rollers. If you are agile, swift, alert, and intelligent, you're likely to be able to pick up a lot of free nickels. But if you're ever caught under our wheels, we'll do our level best to squeeze every cent out of you.

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