Citibank's Gas Credit Cards Run Dry

Consumers Discover Bank Closes Co-Branded Mastercard Accounts Without Warning

(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.

He noted that Citi is not the healthiest bank. In fact, Citi posted $8 billion in consumer credit losses for its third quarter last week, including both mortgages and credit cards. Like many banks with big consumer lending portfolios, Citi is expecting defaults on credit cards to rise in coming months. Credit card delinquencies typically track the unemployment rate, which is at 9.8 percent and is expected to top 10 percent soon.

Analysts noted following the earnings report that Citi has sharply reduced its outstanding credit to consumers.

A card being closed may, but does not always, damage a person's credit score.

Such scores, which lenders use to determine if you're a good credit risk, take into account a series of factors, including how long you've had credit accounts, your payment history and the balance versus available credit.

It could be that last factor that hurts consumers most, said John Ulzheimer, president of educational services for Credit.com. If a consumer had a high credit limit on the closed account, and that credit is no longer available, it could alter the "utilization ratio" for the person's remaining credit. If another type of credit carries a high balance, the loss of the credit line could push down their score.

Ulzheimer said banks have been routinely making such moves in the past year and a half, mostly on a case-by-case basis. "Every once in a while you'll get a huge pop in one particular card product," he said.

Card holders who think their cards were unfairly shut down can try to contact the bank and ask for reinstatement, but Ulzheimer didn't hold out much hope for success. "In this environment," he said, "it's not as successful as it was in the heyday of credit cards, where you could in fact call and plead your case."

[ingridone]

I did not receive notice on my Exxon Citi mastercard until yesterday the 23 of October after I tried to pay for my prescription at Walgreens on the 15th. Thanks alot Citi card after I have been with you for 20 years. Paid on time, no large balances. I see how you treat good customers. Between you, BOA and Wachovia, you can all eat cat food. Getting a bail out from taxpayers and doing this to the little guy and then giving out bonus's to the tune of 24 billion. My money is transferring to a Credit Union, customer owned.

[2tired2]

Cut off the banks!

Cash your check and use cash...that will fix em:)

[tmittelstaed]

I doubt very much that the people with closed accounts were closed due to being potential risks. I would bet that they were closed precisely because they did NOT run balances, and they paid in full every month. The banks don't make as much money on these credit holders as they make on the credit holders that regularly fail to pay credit cards on time, or run balances of under $500 on them.

Having a perfect credit score isn't the be all and end all. We refinanced earlier this year with BOA with no problem, getting the best rate and all, and our credit scores were good but not perfect. Frankly these credit card holders are probably much better off without the credit cards in the first place. Paying for gasoline with a credit card is rather foolish, in my opinion, unless you taking a long trip or some such. A lot of gas stations have a "cash" rate that is lower, and it's wiser to use a debit card for these kinds of ongoing monthly expenses.

[puzzler125]

The close date was Wednesday, and letters were sent out Monday. Gee, thanks for all the notice!

[Justme8811]

I have checking at BA and two credit cards at Citi (thanks to WAMU'S failure). I will be changing all of them to a new bank as now they are nothing but crooks! Goodbye!!

[nmfaxman]

Check to see if the card is by CITI and transfer the balance to a more trustworthy company and see how long these back-stabbers stay in business.

Oh that's right they will just take our tax money under some kind of stimulus and go spend a million bucks to party on how they SCREWED everyone.

I am out of ideas and money.

[burneb]

When the economy recovers, Bank of America and Citibank will again spend millions of dollars on marketing, all gleaned from high rates and fees on customers, to lure back those they treated badly during the down cycle.

It won't be the first time around this block. Once again, some sharks got paid a lot to think up these card tricks. But pity the customer who has just pumped a tank of gas or finished a restaurant meal, only to discover the hard way their card is suddenly useless.

Next February, some Federal law changes will limit a few of their worst practices. Some of these I think are actually intrusive on freedom of contract between vendor and client, but hey, major card issuers certainly brought it on themselves by their abusive practices. No sympathy for them here.

I disagree that it is easy to live without credit cards. Try reserving a hotel room, renting a car, booking a flight, etc. without one. Even if you carry no balances, they have become as much a necessity as convenience, which is part of the justification for more regulation.

[locally9]

Here is the deal with Citi Bank Cards. The whole truth to the matter is they needed to show a loss for the quarter. What better way then cutting off those credit cards and not telling the customers. They show the loss because the customer didn't pay bill which in turns makes them able to swallow a loss and claim a huge loss to government. When is our President Obama going to wake up to the scams so many banks are using. Nope let's bail em out but to heck with our people the old don't need a Social Security raise but the bankers and everyone else is being bailed out. It's time our dumb that is right out dumb President do something for the people not the big businesses.

[Barb304]

You just have to love the logic of these loan sharks aka creditors. Firat they raise your interest rate. Then they lower your credit limit which lowers your credit score. Then they run a 'credit check' and since they've lowered your credit limit which has resulted in your credit score being lowered they cancel your card. It's capitalism run amok! And let's not forget, these are the same banks whose ***** we, the very customers they're screwing, 'bailed out'! Hey, Obama, it's time the consumer got a bailout. Then we can pay off all these crooks and we'll have all kinds of cash with which to stimulate the economy!

[snaptrap1-2009]

Hey, folks this whats called "legal pencil thieves"

[Neva4Granted]

I must admit that cutting off a credit line with no warning is a bit drastic. Unfortunately, in this day and time these type of standards are the norm. Being that I worked for a financial institution, I can see why you would not further extend credit to someone whose credit score had dropped. Usually, that is the only reason. Most banks extend to those that have a 640 or higher and scores are checked about four times a year. The customers can continue to pay their balance and pay down other balances that they may have with other institutions and maybe one day their credit line will be reopened.

[tmittelstaed]

Credit scores aren't the whole picture. A customer can have a better-than 640 credit score by never paying anything late, by not carrying balances on any of their credit cards, car note, or mortgage - yet they can have a home that's got less than 25% equity in it, a car note on a $30K car, and no savings so to speak - and still be at risk of foreclosure depending on their income - all it takes is a job loss. If I were a bank I would probably pull their credit cards as well.

As you say, it's best to carry as little debt as possible and that includes your mortgage. The smartest thing people can do in today's economy if they are working is to pay off all non-mortgage debt, then when that's completed, make additional principle-only payments on their mortgage.

[kbbpll]

They're just screwing their "freeloaders", i.e. people who DON'T rack up a bunch of finance charges and late fees, but DO rack up "rewards". In other words, screwing their best customers. These companies are no longer satisfied making 2-3% on every purchase. Buh-bye Citi!

[payback108]

The next big bailout coming soon too tax payers every where

[jc80013-01]

Credit is hard to live without but Credit Cards are easy to live without. Save money for emergencies and cut up your Credit Cards. The only way to get a good deal is to put yourself in charge. If you operate from a position of need then you have already lost. It would be an interest experiment to see a group start a blog with a Credit Card in mind to make an example of. In this blog there would be a time line and people would link to it through Social Networking sites. They would say in two months we are going to get as many *&^%&6Bank Credit Card holders to call and cancel there cards on the same day. If enough card holders did it and the banks saw the resolve as strong you can bet there would be change. Banks only have the power because we let them.

[Oregon_State_OSU]

Oh and Yesterday on NPR Radio they said that Bank of America posted a 2 Billion Dollar Loss for the last Quarter.

I am so Happy that Bank of American posted a loss all they are is a bunch of money and fee collecting _______________.

[Oregon_State_OSU]

Citibank & Bank of America

I have refused to do any kind of Business with them for a long time. Especially Bank of America they are a bunch of thieves and fee collectors to say it nicely.

[mikehuynh-2009]

I agree 110%

[hungry1968-16]

I paid my car off two years early, and saved $578 in interest, in the process.

Eat that Bank of America!

I'll do everything in my power to stop doing business with them ever again.

[canislupus16]

BOA is the about worst I've come across. Once I learned how they operate, which was when I first incurred a balance and was charged interest on it even though I paid it flat, I paid them off and never used the card again, and closed my account with them.

I'm more fortunate than many though, fortunate in having a career that gives me some financial wherewithal and flexibility to choose who I do business with. More importantly I think I manage credit and credit card companies better than they manage me. However, after establishing my good credit pattern with two of them, they got really nasty and tried to change the terms because I wasn't making them enough money.

One ended up in an action with I believe the Justice Dept or some other agency and I got a refund check for interest charged that they agreed in a settlement to return, and the other I fought on the phone over their dictatorial "policies" and finally somebody in the company moved it up the food chain far enough that they reversed themselves - got some official letter from them saying how sorry they were and that they had "mistakenly" changed my terms, and they were changing them back to the original terms - THAT THEY HAD SET UP AND AGREED TO! In essence, which was my contention and I argued with them, they had breeched a contract. Of course, I did threaten to report them to my state AG (um, I'll give you a hint, my particular state AG is well known for going right after Wall Street and Corporate sc*mbags) and consumer affairs office, as well as report them to the three credit reporting agencies; I figure that helped. The point is, don't just lay there and take it up the *ss.

The sad part is, and I argued this point with both the companies I'm referring to, they create their own self-fullfilling death spiral by sticking it to the very people who might otherwise make it through okay, but instead make it virtually impossible to get out of a credit hole.

While we're blaming the credit companies, let's put most of the blame where it is due - individual members of Congress that consider a campaign contribution more important than protecting their constituents' interests. I guess that's virtually all of them.

[bubbadubba]

Didn't Citi get a big bailout from the taxpayers who they shafted?
Interesting.

[bubbadubba]

Too bad that hurt everyone's credit score but that's the way the scam works.
If you close an account it is a negative on your score because in the words of the credit people " you can't trust yourself to have the card".
Her credit score probably took a 50 point hit.
NEVER GET OR USE ANY CREDIT CARD FOR ANYTHING OR YOU WILL BE SORRY!

[Constitionalist]

Never bank or get credit from CITI again. Problem solved.