Credit Card Company Predatory Practices?

14 Apr Credit Card Company Predatory Practices?

How can you get money from Citibank?

Well, not by asking for it. Like the unsolicited credit card applications that used to flow to our mailboxes by the hundreds of millions every year, this offer from Citibank, to pay you to STOP using your card, is by invitation.

Called the “Citi Partner Payment Program”, it apparently has been around there under the bushes for many months.  Of course, no advertising necessary, as Citi decides whose account it wants to dump.

This is part of the credit industry cutting back credit lines, trying to limit future losses, after the horses have been out of the barn for so long, the barn is falling down.

So, using who knows what standards, they send a written offer to cardholders, that if they pay more than the minimum, stop using the card, they will give you a credit of 20% of the amount above the minimum payment, that you make.

What’s the catch?

What, you don’t trust Citibank?

Well, if you complete the program, you are rewarded with – a decrease in your credit limit, of, the amount over the minimum that you paid, plus, the 20% credit you earned.

And the usual constraint, if you goof up, miss a payment, late, change your mind, they will not give you the 20% credit, and they lower your limit anyway.

Bank of America just raised rates on a bunch of cardholders, but, you can decline the increase.

Cool, you say, but you have to stop using the card.  Still, if your balance is a transfer from another card, that you switched for a low rate, you get to keep paying the low rate on that balance.

Kudos to for following both of these stories.

Chase takes the cake with a totally unjustifiable move, telling people who made those balance transfer deals, pay “x% interest until the balance is paid off.”,  that, well, they didn’t really mean it after all.

Some of you were doing the logical thing, making the minimum payment on the low interest card, which, obviously, means it takes longer to pay off.

Well, come on, you expect Chase to put up with this behavior?

So, they slapped on $10 service fees per quarter, or month, and upped the minimum payment from 2% of the balance to 5%.

And got their little butts sued as a result.

Damn lawyers.

Congress already passed legislation to outlaw these type of one-sided changes in the middle of the deal, but that is not effective until next July.

I guess Citi just felt they had to get in a few more licks before the rules change.

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Jay S. Fleischman is a bankruptcy lawyer with offices in Los Angeles and New York. He can often be found on Google+ and Twitter, where he shares information about consumer protection issues and personal finance.
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