Anyone considered the possibility that it's just their own stupidity--that is, their systems aren't set up to detect or prevent it?

I mean, we all take advantage of loopholes with airlines and other providers because they're just too big to notice the little things we can do...I'd assume the same could be true of a giant bank.

Could be.

Thanks for the info, OP. I'll have to look at this. I have been a Chase/United user, but if Citi is permitting churning, I may have to reassess my card usage.

"I see dead banks."

A positive for your credit score is more available but unused credit. That will affect your credit score in a positive way if you keep an account open.

This has been discussed many times in the 'Other credit card forums'. My take is:

1) The larger the corporation, the slower it is to change. This is due to complexity of updating established procedures across multiple divisions.

2) There is the free word-of-mouth advertising they get from happy churners. I have told many of my friends, but only two took me up on it. And those two just did it once , kept the cards and used them to accumulate debt.

3) I suspect there are many Citibank employees who churn themselves, so naturally they don't want to kill their favourite goat.

Based on current environment, I suspect Citi will not allow churning forever. I just don't know when it will close this loophole.
Contract to others, I actually current have 0 Citi AA card and just plan to get first one. I was too busy for other bonus points for Citi TYN card previously.
Luckily I at least get 2 cent per point this Feb. Now TYN is nearly dead so I will try get several Citi AA cards.

Another possibility is that they haven't found a cost-effective way to do it, given the several types of cards that they do want you to get. They currently allow only one bonus per account, and it would be "too drastic" for them to allow only one bonus per customer, but they havent' figured out a good in-between restriction that they can communicate clearly.

It's simpler at Chase: For UA, you either get the UA Visa or nothing. So it's easy for them to say "if you had a UA card before, you won't get another bonus."

But AA has MC and Amex and (if you look hard enough!) also Visa, and they want you try each of these. And coming up with legal language which entices users to try each of these while only allowing them to try one of each of these is an issue.

There's already enough confusion at other programs about Platinum vs World vs Signature, and whether the bonuses can be gotten just once more when they introduce a new "degree" of the same type of card. Citi may realize that wording such as Chase's cuts down on appllications by people who say "I won't bother, I might not get a bonus", and figures the lost customers with Chase-type language would cost them more than the churners currently do.

Meanwhile, Citi's lawyers are probably too busy with other stuff to spend much of their time figuring out how to come up with clear lanuage about when you would and wouldn't get the bonus.

Also, there are seemingly fewer and fewer humans available to deal with this. Every month more is done by automation. The computers decide who gets a new card, the computers decide how much they get, and the humans are dwindling so much they don't even spend time to pitch add-on products as much any more! (I guess they found the return on add-on products wasn't worth the extra minute per card activation call?) It's remarkable that card activation still involves a human (but for how many more months) when at other card companies that too is automatic.

Finally, keep open the possibilty that Citi may have found that churners are more loyal. The close relationship between the amount of cards you can get by churning only Citi and the point at which your inquiries in 6 months max out is very tight. So Citi may have realized that this keeps people from applying for as many cards from the competition. (Look at how many posts -- even threads -- there have been in the Other Credits Forum about stuff like "can you still apply for a Chase card if you're churning Citi?"!)

What's your source of information for the claim that "FT (and savvy non-FT) community is taking them to the cleaners?" :confused: Do you have the financial info to back up this claim? Or is this just wild speculation on your part?

As for whether they have a death wish, I doubt it. But if they are on a death watch, well, I think everyone knows that! :eek:

Another thing Citibank may be counting on is churners losing track of all their accounts, and thus missing paying on time occasionally and/or auto-renewing an account they didn't intend to.

They have been doing this for enough years, and the economy has gone down enough, that if their strategy was not giving them a net gain, they would have dropped it. They haven't. Just because you can't see their logic does not make them wrong.

For example, how many of us have tried to explain our Mileage Runs, or CC churning, or buying coins from the Mint, etc. to friends and family? A few of my friends have listened for a few minutes and congradulated me, but universally none have gone to the effort to actually try (other than the token effort of my parents who did bother to sign up for Dining Rewards since they usually eat out, so they might as well get some miles sometimes, but it did little to re-direct which restaurants they go to). How about that guy who scored early on the USAToday promo of 1000 miles for less than 1 cpm for new accounts? He paid for a month's subscription for all the apartments in his building and scored all the miles! Or PuddingGuy, or BlueGopher scoring 1.25 million and 600+k respectively for well under 1 cpm buying hige quantities of pudding and cheese?

By the same token, our friends and family think we are a bit nuts, but to us the advantage is clear.

Telling someone else they are nuts is rarely productive; and in these forums is potentially detrimental to the community who are trying to score on those promos.

And it is impossible to get an intelligent answer here since noone can know (except those who actually know, and they are restricted from telling).

Kindly play in your corner quietly,

Steve

When a bank creates a credit card account the revolving line of credit is typically bundled with others into a security. Citi earns fees when selling these securities. The line of credit for a specific card account remains in the same loan pool for the duration of the security. Different from mortage backed securities the issuer retains ownership of the credit card account because revolving credit lines do not have a predetermined amortization rate or payoff date. The issuer distributes interest payments to the owners of the securities, and uses principal repayments to fund loans to cardholders who draw more of their credit line during the life of the pool.

In this context you can see that a card which is used briefly and then paid in full is useful because it generates early cashflow for the loan pool with virtually no risk of default. The aquisition cost of the new accounts, including the miles, points or affiliate payments are no doubt built into the pricing of the securities.

It would be better for Citi if you kept and used the card long term, because Citi would earn fees (merchant transaction fees, annual fees, foreign transaction fees, various penalty fees). It would only be better for the security holders if you carried a balance, because they only receive interest, not fees.

You can read more about this in the FDIC Credit Card Securitization Manual

http://www.fdic.gov/regulations/exam...ecuritization/

...and you can read ample opinions about this process, including the "off balance sheet" variants using search term: credit card securitization

Yes, they are stupid.

They wouldn't waive my annual fee (literally, the people aren't empowered to think - they can only do what the computer lets them) so I had to close my account and open a new one with the fee waived AND they now owe me 30,000 bonus miles. I didn't want a new card or the bonus miles....but I won't pay $75 to avoid it either.

To top it all off, they only approved my new card for $1,000 which isn't enough to charge anything meaningful, so they also won't make any money on my charge volume now. The line on the closed card was $28,500 - and they won't transfer lines between business cards.

Completely backwards thinking over there.

Absolutely stupid.

maybe I'm wrong, but rumors of their death may premature

from CNN

Citigroup delivers surprise $4.3 billion profit
http://money.cnn.com/2009/07/17/news...ion=2009071708

Completely, utterly, indefensible wild speculation on my part. LOL. After all, it was a speculative Q. :p

You think everybody knows that? You a mind reader or is it just wild speculation on your part? (:confused: / :rolleyes: - take your pick)