Grr! CitiBank To Charge "Deadbeat" CC users!

The BBQ Pit
61

Here is where you may have unintentionally sounded dismissive of our right to piss and moan, and indirectly implied that the people pissing and moaning were not quite as sophisticated as you.

Perhaps it’s just me, but I got a vague vibe that you might be unintentionally promoting a mindset in which we stifle dissent.

And here is where you clarified things.

I want people to piss and moan about such practices, because their bitching and moaning alerts me of these businesses. That’s part of the process by which companies are told by “the market” that they’ve made decisions that may ultimately work against their bottom line.

At first, I assumed you were basically trying to tell ralph124c to shut up and accept how the real world operates," when he was righteously expressing his anger. From my perspective, his anger is justified even if the companies’ actions are technically within the law. Why shouldn’t we be mightily pissed when these companies change their attitudes from, “we’ll treat you nicely until you fuck up” to, “we will do absolutely everything, no matter how much we have to twist the language (within the law) to screw you”? People can express anger, even at things that are perfectly legal, because that way we can change the laws to make them more fair.

Now, the TILA is a law, but it’s a law that was passed to quiet consumer protests while still allowing enough loopholes that the CC companies could still screw the consumers. As a result of the TILA, consumers can find out the interest charges fairly readily, but TILA allowed for unilateral changes in the contracts they entered into with the consumers, and it didn’t adequately address other shifty revenue enhancers such as arbitrarily changing the due dates of the cards in order to generate late charges, arbitrarily dropping peoples’ credit limits below their current balances in order to charge overlimit fees, or moving to double cycle billing, which is so complicated that no one really seems to understand it.

So, even though some of these abuses (as perceived by consumers) are legal (as interpreted through the TILA), it doesn’t mean that we have to accept the assraping that the CC companies are legally allowed to give us. Let’s express enough anger that Congress at least write a law that prohibits companies from unilaterally changing the terms of contracts.

At this website, you’ll find many people bitching about many things. I don’t sympathize with many of them, but many others have legitimate complaints against actions that are legal-but-slimy and actions that are flat out illegal. People may be exaggerating, but I know people who’ve experienced some of them. I was particularly fascinated by the sheer number of people complaining about Chase, and there are quite a few complaints against Citibank.

Here are some complaints:[ul]
[li]A person makes an electronic transfer to pay their bill on the due date. Since it’s past 4:00 PM in the time zone of the company’s main address, the person is charged a late fee. Slimy, but legal, and it happened to someone I know.[/li][li]A due date occurs on a weekend, and the payment is received the next business day, and the customer is assessed a late fee. Slimy, but legal, and I’d actually fault the customer for cutting it so close.[/li][li]I arranged to have my balance paid in full via automatic transfers from my bank account. They changed the due date, my automatic transfer happened two days later, and I was charged a late fee. Slimy, but legal, and in this case I want to break the kneecaps of whoever was responsible. I admit that I WAS TOLD ABOUT THIS BEFORE IT HAPPENED, but since I’d been on autopay for so long, I stupidly got out of the habit of reading every single line of my statements to see where they might be trying to fuck me over.[/li][li]People are offered low rates on balance transfers, and the low rates are guaranteed for the life of the loan. Except that at some point, company suddenly more than doubles the size of their monthly payments. The customers are told they can keep their low interest rate with much larger monthly payments, or keep their old monthly payments if they agree to be charged a much higher interest rate. Maybe that’s legal, but it’s kind of a violation of the basic terms of the contract they originally offered. Despite whatever they can cram into the fine print, judges have ruled in some cases that if the agreement says one thing in large print and exactly the opposite in the small print, the contract was worded to deceive the consumer and was unenforceable.[/ul][/li]
I’ve been debt-free for long enough that I shake my head and mutter about personal responsibility when I hear how people are frantically transferring balances from one card to another to try to approach bankruptcy as slowly as possible, but in the past year, there’s been a fundamental change: my tax dollars started being sent to the banks to give them 100 cents on the dollar on risky investments that they made. They are getting special treatment, while consumers who were on the brink are getting shafted by sudden legal-but-unethical changes in the companies’ practices.

62

groo, didn’t mean to sound as if I were saying “don’t complain”. It was meant as more of a “complain about things that mean something” versus “complain about how a service not meant to be free will no longer be free”.

If the OP was here griping about any of the 4 complaints you’ve listed, I would agree (although I would complain about myself more than the bank for #3). The other mechanisms of gouging customers remedied by the Credit CARD Act of 2009 - I’m also all for complaining about those. I’m just not for complaining that the interest free micro-loans customers have been taking for years will not have a cost associated with them. I don’t think it is reasonable to expect to receive something-for-nothing indefinitely. The OP can get upset that he is losing a free service, but I felt the the OP thought he was entitled to the free service, and that if the banks weren’t controlling Congress, he would continue to be entitled to it.

Lastly, my note about congress in banks’ pockets and vice versa was only relating to this particular complaint, not in general. At the time that the Glass-Steagall Banking Act was repealed, I thought it was a good thing for US banking. Turns out, I was wrong. Thanks to the repeal, banks got “too big to fail” and taxpayers have had to fund their bailouts. The banks got Congress to repeal a law that held them in check, and as soon as they could, the banks let themselves get out of control.

63

The terms also allowed them to jack up interest rates randomly, at least until the law goes into effect. I’m definitely not accusing them of doing anything illegal, but on the other hand someone who signed a contract with a specific expectation of no fees has every right to get pissed at the bank. I select cards with both no fee and cashback options, and if any of my cards try to charge me they go flying back with a nasty call to customer service.

And I still challenge your contention that customers like me are unprofitable. If we are, the people who run the credit card companies are idiots, and there is little evidence of that. Not as profitable as someone who runs up big charges, true, but we represent less risk to the company, and thus can be expected to provide less return.

Discover has a program, which I just signed up for, which offers 5% cashback on groceries this quarter. Now, if they made me ineligible for this program because I never carry a balance I’m fine with it. Maybe they get a kickback from the grocers. I’m just assuming there is a good business reason for this program - do you doubt this?

64

I don’t bother calling customer service, as the person on the line is powerless to do anything about it, didn’t make the decision, and shouldn’t really care. I just change providers, like I did when Citi started screwing up my account and not fixing it.

Would you prefer not profitable enough. At $48 billion annually, I can’t imagine the merchant fees not covering operating costs and leaving a few sheckels afterwards, but I don’t know the operating costs.

Also, I’m betting that their ability to datamine accounts on an individual level has grown quite a bit over the last decade (I thought I said that before, but I may have edited it out).

Discover is a different story. Despite being around since 1985, it never really gained traction. Discover wants to put as many cards as possible out there, because more cards means more demand to use them at stores, which means more stores will sign up to accept Discover. Discover also charges higher merchant fees than does Visa/MC. Visa and MC have a 20-30 year head start (1958 and 1966, respectively, I believe). This is probably going to backtrack a little on what I said early (as I’m not writing a dissertation nor being edited), but there was a time when any customer was a good customer for Visa/MC. They wanted consumers to demand merchants to accept their cards. I don’t know if you are old enough to remember when major department stores only accepted their own credit cards and not Visa/MC, or when you couldn’t buy gas or groceries on credit. Now, Visa/MC have saturated the market. No need for every individual to demand merchants to accept Visa/MC.

65

At least American Express has all along had the simple annual fee, pay-in-full-every-month option – as a matter of fact it used to be the only way their nonbank cards worked.

And yes, there is a wee bit of the same thing going on with the credit cards as there is with bandwidth, cable channels, airline services, car rentals, etc. – Companies in all sorts of fields are trying “decontenting” and “unbundling” things they used to “throw in free” when things were good and the idea was to offer whatever it took to get warm bodies in the door (though TANSTAAFL, someone else somewhere else was subsidizing those goodies for you and me all along…) , now that things aren’t quite so good, and/or they have realized people have so grown to expect X or Y that they’ll pay for it, or so depend on the service they feel they have no choice but to submit.
Still it IS aggravating and kind of a slap in the face that the responsible, though not 100% perfect, not a high-roller, user of credit may eventually end up with an instrument that applies to him/her the terms and conditions that used to be applied… to the “deadbeats”: high rates, subscription/use/maintenance fees, lowered total limits, lowered hold limits, lowered cash advances, shorter due dates and expirations; heck, how long until people begin getting asked to secure part of their limit? Oh, sure, in the model being set up the real deadbeats and the people with weak credit should end up with NO credit cards at all (until the next upswing in the economy, when the preapproved letters will again flow through the mails, you think not?), but it does feel kind of insulting to hear “Good news, as one of the few who CAN get credit at all, you have the privilege of choosing that the interest rate YOU pay US on your debt will be 20 times the rate WE pay YOU on your savings, and BTW here’s all the nonnegotiable fees you must pay for the privilege and all the penalties you’ll incur if you so much as blink. Or you can always just not use credit AT ALL! Thanks for doing business with us.”
Nowadays ISTM Visa/MC would prefer if you don’t carry balances, you used their branded debit cards, where the sale amount is immediately withdrawn from your bank and the fee’s collected on the spot.

66

Yes; when I started my post, I’d intended to explain why people may have started arguing with you, and how subsequently you clarified your positions and ended up sounding completely reasonable. However, I then veered off into my ranting about technically legal yet rather unethical CC company practices & forgot to finish my thought.

67

You’re really missing out then. Sure, customer service can’t do anything about it, but it’s the only way to go up the chain. Just one step up from customer service is somebody who can do something. According to the pit threads from service reps pitting their boss, the boss will likely give in and give you whatever you want.

But, more importantly, I don’t find this is in any way in line with what you said earlier. You claimed to be a “good customer” and that such a customer could just walk in and get things changed. And, yet, by your own admission, you couldn’t. So you are just as bad a customer as the rest of us.

Of course, I would never call you that. The “good customer” you refer to is either somebody who is so rich that losing their account will actually matter to them or somebody who has “connections”. I doubt you are in the first category. And the second is a pretty sleazy place to be, calling in favors or getting friends to lie for you.

68

Hmmm…I first heard this term three years ago from one of my friends who works for a non-profit that helps consumers with debt management. Granted, I don’t know whether he was in the credit industry before this (I didn’t know him then), but he claimed the term “deadbeat” was used by some in the credit industry for folks who paid off their bills on time.

69

I don’t think this is very likely on a widespread scale. The market isn’t like when major credit cards first came out; they’re competing with store credit cards and debit cards now. My bank pays a nice bounty on interest to me for using their debit card. They do it to get the transaction fees, and to get me to keep more money in my account with them (at 5.51% APY, I don’t really mind the latter). If my major credit cards all started charging fees, I’d dump them and move business to my Target card (unlikely to charge a fee) and my debit card. Yeah, I’d miss the float, but for me, it’s really more about convenience than float. I filter so many charges through my card not to get the float for a month but to get the cashback rewards, anyway.

Frankly, I think this is a fear tactic. “You won’t let us abuse people through confusing, manipulative practices like double-cycle billing anymore, so we’re going to hit the affluent and financially savvy customers with feeeeeess! WooooOOOOoooo, are you scared?!” Whatever. The affluent customers will move their accounts to other financial institutions if that happens, and someone will be left that doesn’t charge these fees.

70

Oh, and one other point of note: many of the major credit card companies, like Amex, have been jettisoning customers all over the place for being too high-risk. Not customers who have defaulted or have made late payments, but just ones that seemed like they might be more likely to default. Amex basically bribed some customers with cash to close the account and has been lowering credit limits as soon as people pay down debt.

How many people out there pay interest every month but yet aren’t at high risk? Some, surely – some people aren’t smart enough to realize that the interest isn’t a good deal – but few enough that there will be insane competition to keep them. If nobody below that threshold can get credit due to crackdowns and nobody above that will take credit because of the fees, credit card companies will go belly up all over the place.

In the end, Citi is testing the market to see if people are willing to accept the fees.

71

Absolutely.

I’m worse than a deadbeat. I’m a manipulator and a bilker. I find the card that is the most beneficial to me and milk it for all it’s worth. And not only do I pay it off every single month, but I pay all my credit card bills electronically 3 days prior to the due date so they can’t claim that my snail mail payment was late and charge me a fee. I haven’t paid a fee other than an annual fee in over a decade.

I just booked by tenth, eleventh and twelth round trip flight to Hawaii using points I accumulated doing nothing else but charging routine spending to my Delta AMEX credit card, taking advantage of their special promotions (e.g. double miles on dining), and using their portal to do my online shopping. Sometimes miles show up in my account and I don’t even know what it was that I’ve done to trigger them.

Retail value of the 12 flights: $12,900. Annual fees paid: $1300.

Do I feel badly? NO! Amex is the one who lured me into getting the card with their bonus mile sign-up and caused me to swipe their card (vs. paying with cash or check) for gas, groceries and home improvement stores because of their “Double miles on gas, groceries and postage” perk. They’re the ones who sent me the email telling me that they’d give me 10,000 bonus miles if I signed up to pay my cell phone bill with my AMEX. They’re the ones who send me emails extending me short-term bonus miles when I switch my spending to another card.

I know what they were trying to do. They were trying to get me to overextend myself and only make a partial payment. I like the analogy that the banks are like casinos. These sweet promotions are akin to the casinos plying me with free mixed drinks in order to lower my defenses. They’re not intended to work AGAINST the company extending them. But sometimes they do. And therein lies THEIR risk.

They gambled on me and lost. For every deadbeat, there are five people who do get trapped in the cycle of short paying and paying interest to the banks. Not moi.

And if tomorrow they decide to charge me a monthly usage fee, I’ll simply switch to another card or go back to writing checks for my cell phone bill and groceries and doctor’s bills and tuition, and then they can lose out on all those vendor fees that they’re collecting.

Honestly, the only people who have room to gripe about “deadbeats” are the vendors. I win because I get free flights. The credit card companies win because they get all those merchant fees. The vendors lose because they’re the ones footing the bill for both parties. I’m sure they’d love to see fewer people paying with credit cards.

72

It seems to give people a perverse sort of pride to think they are somehow gaming the system by paying on time and actually using rewards currency.

Despite what you might think, you are actually very profitable (for the most part), especially if you pay a fee to carry the card. So please, keep on doing what you’re doing.

73

Precisely. And the “deadbeats” who pay off their balance in full every month are like card-counters at the blackjack tables. I understand completely why they want to exclude them - on average, they will lose money on them.

I am just like a card-counter who goes from casino to casino. I get three or four credit card offers a week - if my current credit card starts charging a fee, I simply cancel the card and pick another that doesn’t.

If all the credit card companies start charging fees, then I use store credit or a debit card. Or write a check.

The credit card companies play the percentages. In my case, they lose.

Sux to be them.

Regards,
Shodan

74

I don’t think I personally claimed to be the “good” customer, which is the first (so rich that losing the account matters). I’m the acceptable customer. I use the card twice a year on vacation, then generally pay it off within 3 months. If they start charging me a fee, then no more credit card for me (or find one without a fee, if any will be left).

75

Except in your case, they probably are making money on you. The merchants pay the card companies every time you use the card.

This fee is just a test to see if they can make *more *money on people like you. If not too many people drop the card, they’ll keep it. If not, they’ll drop it. They’re not losing money on you (otherwise you wouldn’t get several card offers a week). They just want more.

76

I agree with most of this and normally I’m against excessive federal involvement in business in general but the credit card companies seem to be getting more arrogant by the day. Especially since its if not a necessity at least a huge inconvenience not to have a credit card.

I have a way better than average credit score and carry a balance
and yet my credit card company who I have been with for 18 years felt the need to bump up the interest rate 1% back in June. No specific reason other than standard BS… despite your excellent credit…blah, blah,etc.

I would dump them on principle except for current financial issues. The large credit limit is a last resort but nice to have as a fall back just in case.

77

Quite true, which is why they offered no-annual-fee credit cards in the first place, and why I am confident that there will always be a company willing to offer them in the future.

I use a credit card because of the convenience and the float. Paying off the balance every month makes it a free, short-term, no-interest loan to me.

I know they will do everything in their power to try to get me to carry a balance, or to pay an annual fee. But I am not going to do either of those things, if I can avoid it, and I think I can.

There was a credit card company some years back that sent out a mailing around Christmas saying, “We know your cash flow is probably tight this time of year. So, as our Christmas present to you, feel free to skip making any payment on your account this month! Happy Holidays!”

Buried in the fine print on the back was a notice that they would be charging the full interest on the full balance.

Makes you feel warm all over, don’t it?

Regards,
Shodan

78

As someone who never pays CC interest but uses their CC for everything under the sun…I understand that to. I will not pay a fee and will not pay CC interest.

If that means we need to part ways, so be it. The relationship needs to be both ways. I charge over $40K a year on my CC…I do it because of the convenience and I get some money back from them. I assume they do it because of merchant fees.

If that isn’t enough for them, they are free to back out. I’m sure someone will take their place. If not, I go back to cash and checks.

79

This.

This is a huge growth possibility that is most likely starting to happen now and will balloon over the next several years.

We are on the verge of being able to tag people individually and accessing their profit benefit to the company. For example, some retailers that have direct mail are starting to be able to tag these adverts and when a person comes in to use a coupon can track if they bought anything else. If they are only buying loss leaders…purge them so they no longer get the adverts.

Using the casino example…it really is becoming something like the casino is able to stop certain people at the door without interrupting other people coming in.

All these loyalty programs you see popping up? Rich datamining possibilities. Studies have even been showing a very strong link between attraction to loyalty programs and profitability of the customer…profitable customers like to let the company know they like the company…so loyalty program refusers/complainers about them ‘tracking’ are most likely unprofitable customers and can be ignored.

We are even starting to see an uptick of combining unrelated databases to analyze the profitability of customers.

Many may find this repulsive. I find it fascinating. I’ve even been tempted to see if I can land a position doing this sort of stuff :slight_smile:

80

If the responses from “deadbeats” in this thread are any indication, I’d say that people are just going to drop the card. Especially now that folks are becoming disenchanted with novel mortgages, plastic money, and whatnot. The safely boring 30-year fixed, pay my bills with a check, clip coupons, and watch my budget like a hawk lifestyle is hip right now. People are on their guard, and rightly so.