cosmic_kid

This used to be the case but no longer holds true in the current climate. In fact, banks are now flagging customers who carry over large balances month to month and, conversely, rate customers who every month pay off their full balances very highly.

bob95409

I had an offer from AMX (citibank) tied to AA, 5000 miles after $725. purchase and 1.2 miles per dollar and waive the $85. citibank fee for both cards.
Got the card and 5000 miles posted before i have rec'ed first bill. will use the citi amx for next year and pickup 20% more miles.
Bob

MileageGoblin

They have always flagged customers with high credit usage to credit limit percentages. And rated customers higher that pay off their balances? Please provide a link as that is baloney. As was stated earlier, the credit card industry (except AMEX accounts that must be paid off each period) prefers customers who carry a balance. Nothing has changed with the climate in that regards. Only the fact credit limits have been lowered for some users.

jaynyc

The name the credit card industry uses for people who DO pay off their balance in full each month is 'Deadbeat.' Their vast profits come from those who pay interest AND miss payments therefore incurring penalties and fees. No matter the economic climate, if they can extract $ from non-deadbeats, they will take the money and run.

brp

Well, at least the rating companies (the ones who really matter when one tries to get a credit card) do rate folks higher who have lower balance-to-credit ratios and ding those who miss payments. I'm not sure of the effects of carrying rolling debt on credit score as I've never done that, but it certainly implies a higher debt-to-credit ratio, and a lower rating, overall.

Well, then, proud to have been a Deadbeat for each and every month of the 30+ years I've owned credit cards. It seems never to have impacted my ability to get the cards I want with the limits I want, so it doesn' matter what they call me

Cheers.

MileageGoblin

I agree, though, if a balance of generally less than 10-20% of available credit is carried over, there is no ding on a credit rating. Thus, I disagreed with the poster who said those people who pay off their credit cards with zero balance are rated higher than people who carry over balances. It depends on the amount of credit carried over. In terms of who the CC company values more: it definitely is the customer who carries a balance with a small debt-to-credit ratio.

Well, I think you know we are just saying you aren't providing as much value to Citi when you pay off your CC each month (which is a good thing). Someone paying the $50 annual fee, charging $100k which equals 100k miles, and paying off their bill each month provides little income to Citi as compared to someone who: pays the $50 annual fee, charges $100k = 100k miles, but pays $1k in interest for carrying a balance.

billgrates3

Y'all may be forgetting the profits to be gained from foreign exchange and from using the large amounts of "float" capital. These apply to accounts that are paid in full every much as well as to the interest/fee earning ones.

cosmic_kid

Perhaps 'flagging' was too inexact of a term, but I'm not talking about credit ratings etc. but instead about credit card issuers taking action on your account with immediate consequences, eg. lowering your credit limit (sometimes below your current balance) based on the fact that you carry over large balances month to month. I'm not aware that this has ever happened before, but I admit I'm no expert.

I have heard/read this more than once, but the only concrete source i can remember right now is from KCRW's To The Point: http://www.kcrw.com/news/programs/tp...edit_card_econ (it's discussed throughout the main topic interviews)

Hayden

In March, I contacted Citi to cancel my Citi Amex card, as the annual fee was due. All seemed to go well--the phone rep assured me that, per the card's conditions, the fee was refunded, and as I had no balance, the account was closed. A few weeks later, I received a letter asking me to reapply for the card.

It was quite a surprise today to get a bill for $7.16--the pro-rated annual fee between when I was billed and when I canceled--plus $0.50 in finance charges. The first phone rep I spoke with told me that billing customers for a pro-rated annual fee was Citi's typical practice. The second immediately refunded the fee and finance charges.

Seems like quite a scam for those who might not pay as much attention to their bill or who might swallow the "pro-rating" baloney.

Though the second agent said no adverse information would be reported to the credit bureaus (i.e., for a late payment, since the annual fee was on a previous bill), I wonder whether that's really true. After all, Citi already tried to get money from me in violation of the card's terms.

mvoight

IntFF

I am using this thread for an unbelieveable practice by Amex: Finance charge even if you paid previous month balance in full and on time. Is Citi same?

In March I was on a trek in Nepal with no access to interent. So- for the February expected balance a prescheduled a payment of $50 for start of March. But some additional charge got posted in Feb and my bal was $93 (of which $50 was paid 3/3 well above the min pay required).

The due date for the $93 (remaining $43) bal was 3/19. I paid another $100 on 3/20.

In the March stmt I had a finance charge of $2.50. My calculation was $2.50 on $43 for 1 day = about 2000% !! per year. Of course, Amex calculates it in another way. I paid at start of April the entire balance of March (w/finance charge).

Then to my surprise, in April stmt I get again a finance charge. I call Amex and asks why? Agent says: per your agreement, if you dont pay in full for month X, you pay finance charges in next 2 !! months.
I told her: either cancel it or let me talk with a superviser. She refunded this second finance charge.

Does Citi charge finance charge for 2 months... after you dont pay in full?

Exiled in Express

It is called double cycle billing and it is in the terms of both the personal MC and AMEX.

hillrider

Unless you use credit cards to spend beyond your means, sign up for AutoPay to avoid such rip-offs.

eireman

double cycle billing-with us for another year I think.

Obama talked about this with the CC companies last week

billboos

Every other card I've seen now charges 3% EXCEPT for Capital One which still charges ZERO. I learned about Capital One on this site about 2 years ago and use it only for international charges --- saves me $300 per $10,000 --- don't get miles on Capital One but seems like a good tradeoff to me