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Sign of the times, I guess...

Two pseudo-zombie Citibank cards we have in our household received notice today that they're imposing a $60 annual fee, effective April 1. The fee will be credited upon the accumulation of $2400 in purchases.

They are making this change "to maintain the quality of our service amid the rising cost of doing business".

To maintain the quality of our wallet, we'll be opting out... Seems more like ransom to me...


<<post modified to add card/account details, illustrating the contrasting treatment of accounts within the same household>>

Here's the breakdown of my household's situation (two adult cardholders, similar credit scores, no joint accounts/additional cardholders between us)...


She has:

Hit with notice

Citi Dividend World:
- opened 2002
- ~17K limit
- last retail transaction: 11/2007
- fixed rate BT 5/2008 (still has balance)

Citi Diamond Preferred Rewards:
- opened 1999
- ~16K limit
- last retail transaction: 8/2004
- fixed rate BT 10/2004 (still has balance)

NOT Hit with notice

Sears Gold MC (converted from an unwanted Sears card, administered by Citi):
- opened (even though online offer was declined) 2005
- ~4K limit
- never used


I have:

NOT Hit with notice

Citi Dividend Platinum Select (former AT&T Universal):
- opened 2001
- ~14K limit
- last retail transaction: 5/2004
- fixed rate BT 6/2004 (still has balance)

Citi Diamond Preferred Entertainment (former Sony Card):
- opened 1995
- ~6K limit
- last retail transaction: 10/2000
- fixed rate BT 2/2001 (still has balance)
- expired time-limited 0% that jumped to 19% last month, that's paid off as of today (thanks CARD Act and your awesome payment allocation rules!!!)

Citi Dividend Platinum Select:
- opened 2003
- ~2K limit
- actively used for retail purchases and paid in its entirety each statement (read: they don't get a penny in interest)
- about 4K in retail charges last calendar year
- 1%/3% CashBack


Other than the fact that I have one account that gets regular use, it would appear that my accounts are less "profitable", yet I've avoided the wrath of any notices. Go figure...

Member Summary
Most Recent Posts
I have a Citibank Dividend Platinum Select MasterCard that I have had since 2006 which is NOT accruing any fees since my... (more)

ValenTime (Jun. 04, 2010 @ 6:41p) |

just to quote my own post, interestingly, i was looking at my recent activity and it seems like citibank just refunded m... (more)

kabukicho (Jun. 05, 2010 @ 6:24p) |

I got hit with a $30 annual fee on my Diamond Preferred Rewards card. I couldn't get the CSR to waive it so I cancelled... (more)

ManInTheBox2784 (Jun. 21, 2010 @ 5:51p) |

Please include annual spend and last use date so we can learn if there is a relationship to the fee notice


Citi customers have received notices of an annual fee effective April 1, 2010 for the following cards:
Credit Card...................................Annual Spend .........Last use date
- Citi Diamond Preferred Rewards MasterCard

- Citi Dividend World MasterCard

- Citi mtvU

- Citi Drivers Edge

- Citi Dividend AMEX

- Citi Dividend Platinum Select MasterCard

- AT&T Universal Card

- Home Rebate MasterCard
Citicards not affected
Credit Card                            Annual Spend      Last use date
 Drivers Edge                                $30          60 days
 Cash Returns MC                             $00          10/2008
 Ada MC                                      $00          12/2009 BT
 Dividend Platinum Select Visa Student       $1000        03/2010 (daily spending, 2% everyday card)
 Dividend Rewards MC & VS   Each:            $1000 or less 03/2010 2% rewards spending pd in full monthly
 Citi Dividend Platinum Select MasterCard    $1200 or less 05/2010 2% rewards select spending pd in full monthly
    Annual membership shown 04/10 statement as $00.00
Therefore this class of card is YMMV.  The concern is many Citi Dividend Platinum Select MC and VS are being converted by Citi to World MCs. See separate thread.
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plese specify exactly which Citi Cards these are... Viti dividend? Diamond prwferred rewards?

SUCKISSTAPLES said: plese specify exactly which Citi Cards these are... Viti dividend? Diamond prwferred rewards?
Sure (sorry for the oversight):

- Citi Diamond Preferred Rewards MasterCard
- Citi Dividend World MasterCard

Both accounts are about 10 years old, with reasonable ($15K) limits. It's a real bummer to see this, but I hope enough people rise up against this nonsense that other issuers refrain from jumping on the bandwagon...

Spending $200 a month is not unreasonable IMO. They just don't want no profit users who keep their cards inactive and charge $2 on it every 3 months to keep it from being closed(like myself). Times of having 20-30+ cards will probably no lessen in future.

It might be a YMMV thing.

Per Aug 20 2009 news, citi had said it was imposing fees on select customers.

Marketwatch said: "We have adjusted pricing and card terms for some customers as part of our regular account reviews," said Samuel Wang, a Citigroup spokesman. "These changes also reflect the dramatically higher cost of doing business in our industry as we work to preserve the broad availability of credit. As part of this change in terms, a small number of Citi customers may be notified of an annual fee."

Read the original article

Got the letter this morning and just canceled my CashReturns card a few minutes ago.

Got the same letters yesterday: Citi Dividend MC and Citi Diamond Preferred MC. Still haven't gotten a note for my Citi Proffesional MC

Have any of you guys been able to reallocate your credit limits?

Although it'd lower our credit scores slightly, I'd probably also just cancel rather than pay any stupid minimum usage fee from Citi or anyone else. Not many cards that Citi has anyway that would be worth the $60 fee.

Haven't received anything yet for any of our 4-5 Citi Cards.

look, i have over 100 credit cards and i don't have a problem with closing 90 of them. to paraphrase a Flyertalker, "This game is not as much fun as it used to be." Just give me one decent card worth my loyalty (ok, maybe 5 or 6), and the rest be damned.

HotSalami said: that they're imposing a $60 annual fee, effective April 1. The fee will be credited upon the accumulation of $2400 in purchases..So they charge you the $60 fee, but then credit it back once you've reached $2400 in spending? Sounds like more of an attempt to get customers to decide what cards they really want, instead of the past practices of Citi just randomly closing accounts.

psychtobe said: look, i have over 100 credit cards and i don't have a problem with closing 90 of them. to paraphrase a Flyertalker, "This game is not as much fun as it used to be." Just give me one decent card worth my loyalty (ok, maybe 5 or 6), and the rest be damned.

Schwab 2%
Capital One 1% (as backup to Schwab for Forex)
Penfed Gas
Chase Freedom

Glitch99 said: HotSalami said: that they're imposing a $60 annual fee, effective April 1. The fee will be credited upon the accumulation of $2400 in purchases..So they charge you the $60 fee, but then credit it back once you've reached $2400 in spending? Sounds like more of an attempt to get customers to decide what cards they really want, instead of the past practices of Citi just randomly closing accounts.
That's the way it works... Here's the contents of their letter (thanks ScanSnap and your awesome OCR conversion! I'd marry you if you had girly-parts attached!!!)

<<edit>>

Just realized that the letter is post-dated (today's the 11th, and they presumably mailed it a number of days ago). I didn't think that Microsoft TimeTravel was out of beta yet...



February 13, 2010

Dear Potentially Hosed Customer,

We're writing to let you know about an important change we're making to your account. Effective April 1, 2010, an annual
fee of $60 is being added.

The reason we are making this change is to maintain the quality of our service amid the rising cost of doing business.
However, because we value you as a customer, we wanted to give you an opportunity to have the annual fee credited
back to your account.

Here's how it works. Each year, we'll credit the $60 fee back to your account once you have made $2,400 in purchases
during that year. That comes to an average of $200 in spending a month, an amount you can reach by using your card
for purchases you already make, like gas, groceries, cell phone plans or your cable bill.

As always, you have the right to opt out of this change and close your account. Please read the Notice of Change in
Terms and Right to Opt Out beginning on the back of this letter so you are fully aware of all your account changes. If you
have questions, call 1-866-915-9425.

Sincerely,

Ken Stork
Citibank (South Dakota), N.A.

HotSalami said: It's a real bummer to see this, but I hope enough people rise up against this nonsense

It was people rising up that caused this whole nonsense in the first place. I believe that this is a direct result of the new credit-card laws that went into effect.

psychtobe said: look, i have over 100 credit cards and i don't have a problem with closing 90 of them. to paraphrase a Flyertalker, "This game is not as much fun as it used to be." Just give me one decent card worth my loyalty (ok, maybe 5 or 6), and the rest be damned.

i wonder how much junk mail 100 credit cards produces. the blank checks, changes to T&C, promotional offers, etc.

nasheedb said: It was people rising up that caused this whole nonsense in the first place. I believe that this is a direct result of the new credit-card laws that went into effect.
I'm certain that this is the result of the CARD Act. I just seems that Citi (and previously possibly BoA) is being the most agressive in becoming "creative"...

Something tells me that if Citi continues down this path, they may become the new Advanta of card issuers...

No, they should make a profit since it is "i cloud bubble" credit anyway. I think they just shortening it to a 3 months cycle. That is why they have a horrendous high interest to force you to repay it asap before it burst. Most people, included politicians, do not understand the risks of these things or the business of finance and tended to blame banks for that matter. Citi is currently being run by hedge fund and stock traders. What do these people know about loans and credits? No wonder the stocks still tank even after the recovery.

Why don't people go read a finance book or something? I think people liked to generalize, jump in things because they too lazy to research it. It's not that they not smart or doesn't know.

From when fee was tested on selected accounts:

Earlier thread

At that time, there were four variations tested: two waived the fee upfront pending $2400 in purchases; two applied the fee upfront and waived it after 12 months if $2400 was charged. The targeted cards were those with Thank You points rewards ...

qcumber98 said: psychtobe said: look, i have over 100 credit cards and i don't have a problem with closing 90 of them. to paraphrase a Flyertalker, "This game is not as much fun as it used to be." Just give me one decent card worth my loyalty (ok, maybe 5 or 6), and the rest be damned.

i wonder how much junk mail 100 credit cards produces. the blank checks, changes to T&C, promotional offers, etc.

Yeah, you should buy a decomposer machine to make mulch from all these mail ads. I once have an idea or buying a ceramic fireplace that use these tons of paper of ads as fuel. If you are in marketing, you should know it cost at least a nickel for each ad, especially color ad and on good paper.

bye bye Citi. You pay me, I don't pay you.

goGTinDML said: Have any of you guys been able to reallocate your credit limits?

That is an excellent idea to try. But what if all their cards will have annual fee unless you spend at least 2.5K?

Majestica said: Yeah, you should buy a decomposer machine to make mulch from all these mail ads. I once have an idea or buying a ceramic fireplace that use these tons of paper of ads as fuel. If you are in marketing, you should know it cost at least a nickel for each ad, especially color ad and on good paper.Dilbert already had that idea, though I have been unable to google it. Also, here is another person trying to do this already though its from 2007, so I guess there must have been a glitch somewhere down the line ... http://www.popsci.com/popsci/flat/bown/2007/innovator_2.html

Meh. I have no problem with banks weeding out innactive accounts. All they do is incur administrative costs and create one more account that can be e-frauded for $5K....for something that brought them $0 revenue anyway. It'll save us all $$ in the long run so big deal. Sure, our credits scores will be pinched a bit as a result but that will just make good credit scores all the more valuable and then those that dutifully paid the mortgages on their upside-down houses will get their just rewards over the deadbeats.

Effective April 1st eh? Maybe it's a joke

HotSalami said: - Citi Diamond Preferred Rewards MasterCard
- Citi Dividend World MasterCard

What's interesting is that Citi still advertises the Diamond Preferred Rewards MasterCard as no annual fee, so this does seem very clearly to encourage "zombie" card holders to close or use their accounts. They no longer advertise the Dividend World MC (nor the Dividend Platinum Select MC, which is what my wife and I both have as our oldest cards), but the CashReturns MC is also advertised as no annual fee.

Has anyone called, pointed out that their card (or something similar) is advertised online as have no annual fee, and tried to get it waived?

ThePessimist said: ... so this does seem very clearly to encourage "zombie" card holders to close or use their accounts.
These cards are "zombies" to the extent that they haven't seen any purchases on them in a while (2004 and 2007). However, they both have balances (from transfers) at low fixed rates, so they see monthly interest/payment action, as well as a healthy stream of blank xfer check offers in the mail...

It seems odd to me that they're willing to effectively terminate the relationship, given the account age and current activity...

HotSalami said: These cards are "zombies" to the extent that they haven't seen any purchases on them in a while (2004 and 2007). However, they both have balances (from transfers) at low fixed rates, so they see monthly interest/payment action, as well as a healthy stream of blank xfer check offers in the mail...

It seems odd to me that they're willing to effectively terminate the relationship, given the account age and current acitivity...

I think account age matters more to us than to them. And what "current activity" are you talking about? No purchases for 3 years? Low fixed rate transfers aren't exactly a highly profitable line of business.

I feel quite confident that these fees are being assessed based on account profitability more than anything else. Sure, an inactive card isn't profitable, but neither is your low rate BT.

My Diamond Preferred Awards has a 0% for life offer. Hope this doesn't apply to me....

HotSalami said: SUCKISSTAPLES said: plese specify exactly which Citi Cards these are... Viti dividend? Diamond prwferred rewards?
Sure (sorry for the oversight):

- Citi Diamond Preferred Rewards MasterCard
- Citi Dividend World MasterCard

Both accounts are about 10 years old, with reasonable ($15K) limits. It's a real bummer to see this, but I hope enough people rise up against this nonsense that other issuers refrain from jumping on the bandwagon...


So you have 30k in credit but don't anticipate spending 4800 between the two cards in the year... not sure why you have them then?

Seems unnecessary?

You don't see how having $30K in unsecured credit can be useful?

jlgrandam said: You don't see how having $30K in unsecured credit can be useful?

You don't see why the bank might want to get something from you for providing you 30k of unsecured credit?

absolutely, but they have been doing it for years (and we have been graciously accepting).

The original fee test last August targeted mostly (but not exclusively) Diamond Preferred Rewards cards.

It is unlikely that an account with an ongoing low-APR-for-life BT would be hit with such a fee, since the lawsuits filed against Chase for a similar action forced Chase to rescind their fee.

why should they allow you to keep a card open, that you have not used in 5 years. They dont have to. But we want to, so that our oldest cards are still alive

credit score calculation by card age makes no sense to me


psychtobe said: look, i have over 100 credit cards and i don't have a problem with closing 90 of them. to paraphrase a Flyertalker, "This game is not as much fun as it used to be." Just give me one decent card worth my loyalty (ok, maybe 5 or 6), and the rest be damned.

give me one decent woman worth my loyalty (ok, maybe 5 or 6), and the rest be damned.

jlgrandam said: You don't see how having $30K in unsecured credit can be useful?
at 20% interest rate that virtual 30k is really useless

Glitch99 said: HotSalami said: that they're imposing a $60 annual fee, effective April 1. The fee will be credited upon the accumulation of $2400 in purchases..So they charge you the $60 fee, but then credit it back once you've reached $2400 in spending? Sounds like more of an attempt to get customers to decide what cards they really want, instead of the past practices of Citi just randomly closing accounts.

Can I charge them 25% interest on that $60?

I received the same letter yesterday and was searching FatWallet for info last night. I can't believe it took this long for someone to post about it!

My card is a Dividend Platinum Select MasterCard. I've had it for 5 years. It used to be a fantastic card, but I haven't used it in about a year. I will be closing the account tonight.

Had both cards for 7 years, but just canceled them few minutes ago. Told cuscare that I don't wish to pay $ 60 fees - hope floods of cancellation so that other companies won't follow the trend. Kind a scary since I have many dormant cards - need to start closing them one by one. I don't really need stellar credit rating - already got low mortgage.

I wonder if this new fee will be directed at CitiGold accounts too - so far CitiGold was waiving the fees for most of the cards.

ThePessimist said: I feel quite confident that these fees are being assessed based on account profitability more than anything else. Sure, an inactive card isn't profitable, but neither is your low rate BT.
Perhaps, but once these accounts are closed, their profitability (regardless of how meager) will be zero. The absence of long-term rationale will haunt them -- potentially into the grave (read: Advanta)...

Skipping 456 Messages...
I got hit with a $30 annual fee on my Diamond Preferred Rewards card. I couldn't get the CSR to waive it so I cancelled the card. Screw Citi.



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