CitiBank Changes Its Ways

Issues Credit Ahead Of Make-Believe Charge

Each year Citibank and I have the same conversation when it tries to slip in its annual attempt to collect an $85 “membership fee” for my credit card. I say, “Cancel the fee or cancel the card” and the fee goes away. This year Citi introduced an innovation: Citi issued an $85 “Retention Statement Credit” for the charge it agreed not to make and did not make. Doing so created an $85 credit. As Oscar of the Citi Retention Department explained it, “We issued the credit before we made the annual charge. But you are not paying the charge.”

This way everything ends happily. The $85 charge is credited but shows as an $85 charge so Citi can maintain the idea that there is an $85 annual fee, but it retains the right to credit it. But to credit it, it must eventually charge it even though it will not collect it. No one ever said banking is easy. Appearances must be maintained to avoid too many cardholders rebelling against annual fees.

Banks have it tough: Low approval ratings, talk of regulation, shaky mortgages about to hit their books for the second round of red ink, credit card fees under attack, hidden fees and annual charges under scrutiny. And that raggedy crowd of protestors on Wall Street attracting attention, when will they go away?

Consumerist Takeaway: Complaints to Citibank about unreasonable charges should start with the Retention Department, not the Credit Department. Ask for Oscar.



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