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Yesterday we talked about how Citi is already abusing the CARD act, finding loopholes around much of the legislation for new customers. Today I want to follow that story up with a look at some of the new “programs” that Citi is now lunching for their existing current customers.
Citi’s New Payment Partner Program
CitiBank wants to “partner” with you in helping you pay down your CitiCard balances. Or so the bank claims.
What’s really going on with CitiCard’s new Payment Partner program?
The credit card company has instituted a new policy. Citi now offers you a 20 % statement credit on every dollar you pay above your minimum balance due for a six-month period.
But the program amounts to little more than a few dollars a month for most people, and comes with so many rules and exceptions, it’s not worth it. What a surprise!
I logged into my CitiCard Platinum Cash Rewards account this week for more information about how CitiBank has found loopholes in the Credit CARD Act . That is when I discovered a nasty surprise.
The bank cut my available credit nearly in half when I wasn’t looking — leaving me with a credit limit only $50 over my existing balance.
Since I’d intended to travel with my CitiCard Platinum Rewards Card next month to earn cash back on my rental car, theme park tickets and meals, this created quite an inconvenience for me.
I read further to find out CitiBank wants to give me free money. The company introduced a new program that rewards customers for paying more than the minimum balance each month.
How This Program Works:
- Pay more than the minimum amount due, on time, in any of the 6 billing periods following enrollment.
- Earn monthly statement credits equal to 20 % of the amount paid over the minimum due.
A handy calculator shows you how much money you might earn by paying different amounts over your minimum balance.
First, I plugged in a minimum payment of $79, and imagined that I rounded up to make my payment an even $100 — that means I’d pay $21 over the minimum amount due.
CitiBank would then pay 20% of that $21, a hefty $4. Over the six month period, Citibank would give me a total of $24 cash back.
Thanks, CitiBank! Now I can almost buy that Grande Caramel Macchiato I’ve been craving.
What if I got really serious about paying off my charge card, and paid an additional $400 over my theoretical $79 minimum payment?
CitiBank would cough up $80 a month for six billing periods, for a total of $480.
But that’s only as long as this amount does not exceed the interest I accrued in that billing period. And once you hit $550 in statement credits, CitiBank is done with handing out money.
This “free money” comes at a high price.
To take advantage of the offer, you must temporarily suspend your account — you can’t use the card for the six-month period. Additionally, as your balance drops, so will your available credit — this will prevent you from charging up the card in the future.
Finally, if you make a late payment over the six month period, you are not eligible for the statement credit.
Is CitiBank’s “Payment Partner Program” Worth It?
I opted out of the arrangement. But I probably should have opted in. After all, who am I to turn down money? The bank had already reduced my credit limit anyway.
But I’d rather take the chance that, as I pay down my balance, they’ll keep my credit limit where it is from this point onward.
Not that I intend to use my CitiCard in the future. But I don’t want the lack of available credit to adversely affect my credit score.
CitiBank is calling itself your “payment partner” in this program. If I had a business partner who contributed in the way CitiBank does with this program, I’d buy them out of the business — as quickly as possible.
So, overall, the program is only worth it to help you pay down your debt on your Citi card. In the meantime, you will almost certainly be taking out a new credit card to meet your actual need.
- CitiBank encourages you to pay more than your minimum balance by offering you a statement credit (20 % of what you pay above the minimum) every time you do so.
- You can’t earn more than the amount of interest assessed in that billing period.
- You can only earn up to $550 in statement credits, total. But you’ll probably earn much less.
- The program only last six months
- You must temporarily suspend charging privileges on the card.
- You must agree to have your credit limit reduced by the sum of your payments over the minimum due, plus the sum statement credits. (CitiBank says this will “ensure you continue the progress in paying down your balance.”)