Citibank is closing credit card accounts with no notice!

[Deneen]

Just last Wednesday I received an email from a friend stating that without notice Citibank closed her credit card account that had a minimal balance and no late payments. She also sent this link: http://blogs.moneycentral.msn.com/topstocks/archive/2009/10/20/citibank-yanks-mastercards.aspx

So, today I receive a credit alert in my email. I monitor all three of my credit reports. The credit alert stated that my Citibank credit card had been closed by the creditor. I've had this card for over 10 years with no deragatory history. I called Citibank and the phone rep asked how did I know it was closed because Citibank had just closed it on October 23. I told her I received a credit alert but nothing from Citibank letting me know my account was closed. The phone rep said my account was closed due to account history. What!!!! You've got be kidding me. My account history was good.

This is just ridiculous. What if I had tried to use the card? This also negatively impacts my credit score because it's less available credit, it's an account closed by the creditor and not me, and it shortens my credit history. I'm negatively impacted by no fault of my own. Moreover, I don't keep many credit cards. It was just for emergencies. If I apply for a new credit card, it can negatively impact my score. Go figure!

I'm just so disgusted by the state of this economy and big business.

[Lynds]

We had a card closed on us for non-use...

[Deneen]

It's the "without notice" that really ticks me off. The credit bureaus had the information before I had it.

[Kristen F]

Wow thats horrible!!!

[Lynds]

Yep...we had no notice, either. Well, except that we got a letter in the mail awhile later telling us what they had decided to do. I'm sure that if we had had credit watch, we'd have found out before the letter...

[Jewel6599]

Hm...I'll get DH to check ours. We have no balance on it because they hiked up our interest rate so we transferred the balance.

[Miranda]

They closed our care credit account without any notice after we paid it off so apparently this is the norm now.

[Kristen F]

Are they allowed to do that without letting you know?

[threelilpiggeys]

I got a letter a couple weeks ago. We had one that had over $5K available credit on it so we purposefully didn't close it because that available credit can help your report. I was mad too because I'm sure my score went down because of it. I haven't used the card in a couple years, that's why they closed it. I have one now with uh... lets just say it's over 10K balance I owe! It's our worst debt. We are closing that one a special way though. We are freezing the % rate to 0% (it's only at 3.99% but with as much as we owe ouch) and we have to pay it off in one year. If we don't, what ever is left we pay a higher % rate. We tend to get huge tax checks back so we are planning on paying it off in a year. And if we don't we can open another one for 0% for a year or six months and balance transfer. I think it sucks they can close it without a protest or opt out notice! they just sent us an opt out thing because the one with huge balance is going to 29.9% !!!! That's why we are closing it! NO late payments either, just to make more money for them.

[Susannah]

I've had it happen for non-use. I don't understand being mad about it? The banks got carried away issuing so much credit and so many accounts, and now they are trying to reign it in a bit. I see it as being more responsible than they were previously. I think it makes more sense to be mad at the credit agencies for the wonky ways they calculate your score.

[Mackerzgirl]

Originally Posted by Kristen F

Are they allowed to do that without letting you know?

They can until the new legislation goes into effect which is why they are busy doing it now.

[Mushu]

Available credit is seen as potential debt. It is not looked at as a good thing by credit reporting agencies.

[Lynds]

It is tricky because too much available debt is bad, but too much debt to credit is bad. Losing your oldest card is bad because it decreases your length of credit history.

We didn't care that they closed our card for non-use. It was tied to a store credit card and the APR was outrageous. We only got it so we could get the initial discount on our purchases that day. It didn't do much damage to our credit because we had no debt other than car and mortgage.

[Susan38]

We had that happen with a chase card. We found out when we went to use it for a larger purchase (a bicycle). We had never made a late payment, had available credit, etc. I think all the banks are doing this to lower their exposure. It stinks. It makes me all the more resolved to pay off my cards and not use them anymore.

[Deneen]

I'm mad at the entire system. It's a catch 22. I didn't even use the card but it's the way the credit bureaus calculate your score that has me PO. I find most people don't understand the whole system and have no idea what's going on.

It's not so much closing the account that upset me. Its the without notice. I have a friend that works for FDIC and the banks are doing a lot of things now not for our benfit but to protect their bottomeline which is more money in their pockets. I'm pretty sure when the economy turns around again they'll be up to their old tricks again.

Basically, the banks want to close accounts and increase interest rates before the new laws are effective.

Originally Posted by Susannah

I've had it happen for non-use. I don't understand being mad about it? The banks got carried away issuing so much credit and so many accounts, and now they are trying to reign it in a bit. I see it as being more responsible than they were previously. I think it makes more sense to be mad at the credit agencies for the wonky ways they calculate your score.