Citibank Closing Credit Card Accounts Without Warning; Sending Letters Five Days Later
October 20th, 2009Via: AP:
Shannon Burdette tried to pay with her Shell Mastercard after filling up her gas tank this weekend but found the card rejected.
Confused, she called the customer service line on the back of the card, issued by Citibank, and was told the account was closed because of something that appeared on her credit report. But when the Sykesville, Md., resident got a copy of her credit report online, the only negative thing she saw was “closed at credit grantor’s request” on the Shell MasterCard account.
“They said there was a routine review,” said Burdette, who maintained that she and her husband, Brian, used the card regularly and always paid the bill on time.
Burdette isn’t alone. People across the country have been reporting similar experiences in postings on various consumer Web sites.
Citi confirmed the basics. The bank said in a statement it “decided to close a limited number of oil partner co-branded MasterCard accounts.” That includes not only Shell, but Citgo, ExxonMobil and Phillips 66-Conoco cards.
The close date was Wednesday, and letters were sent out Monday to customers informing them of the change, a Citi spokesman said. The bank would not say how many cards were shut down or how much available credit they represented.
But unlike the bank’s move to shut down its Home Depot cards, Citi did not discontinue the sale of these cards altogether. It is still accepting applications, promising rewards like 3 percent cash back on fuel purchases and 1 percent cash back on other spending.
No law, including the Credit CARD Act that has started to take effect, prevents banks from closing down credit accounts without warning. Credit card issuers all maintain the right, typically listed in the fine print on credit card agreements.
Citi would not say why the cards in question were shut down, issuing a statement that said only it continuously evaluates its products.
“It is kind of an extraordinary action, but these are extraordinary times,” said Ben Woolsey, director of marketing and consumer research for CreditCards.com.
“They said there was a routine review,” said Burdette, who maintained that she and her husband, Brian, used the card regularly and always paid the bill on time.
There ya have it. The credit card industry refers to these kind of card users as “deadbeats”. The thing is, they aren’t making money for the card company by carrying a balance. Never mind that merchants who accept credit cards give a percentage of each sale to them. This is a good example of corporate logic. Gone are the days when a company cared about its good name. Who has to do that when you have a monopoly?