Citi Cards Closing VISA Accounts

Today, I just received a notice that Citi Cards was closing my VISA account. One would think that on Tax Horror Day (April 15^th) that the worst you would have to worry about is the IRS. I guess I was wrong about that one.

In part, the notice reads "In our normal course of business we review the standards that we use to extend credit. We recently adjusted our credit standards and your account does not meet out new standards." Hence, my VISA account with them will be closed next month.

My exact offenses are "Proportion of balances to credit limits is too high on revolving accounts, too many accounts with balances, proportion of loan balances to loan amounts is too high."

None of these offenses are particularly surprising based on the current economy. With unemployment still floating between nine and ten percent, personal incomes down, and labor being underutilized, a lot of people are in danger of being guilty of these same economic crimes. I am surprised that they did not add "self-employed writer, full time college student" to the list.

In my case, this card cancellation could not have came at a worst time. I was actually planning on using that card during summer semester. And given that many card companies are tightening the credit screws, this closure just increases the likelihood that I will lose more of my remaining credit limit, if not more cards to closure. After all, Citi has just increased my "utilization ratio."

Given my feelings at the moment, I am not surprised at the outrage that pours off the approximate 227 thousand results I got from a simple search on "Citi Cards closing accounts." I understand the sentiment of Stephanie Quilan, who compared Citi to a "loan shark" when they increased her interest rate from fifteen to thirty percent.

At least, I got notice of the closure of my VISA account, unlike many of the customers who had their gasoline company co-branded MasterCards closed out in October 2009 (Shell, Citgo, ExxonMobil, Phillips 66). I also do not have to worry about having to charge $2400 or more a year to be credited a sixty dollar annual fee as the card holders of Citi Diamond Preferred Rewards MasterCard, CIti Dividend World MasterCard, and Citi mtvU, got informed in February (the annual fee took effect on April 1^st).

But I must admit that I wonder about Citi, CitiCards, and CitiBank. How can a company afford to generate this much corporate bad will? In my case, I will never do business with Citi ever again if I can humanly help it. Not so much because they closed my account, but because I think that their thinking is not terribly clear and slightly muddled.

Why do I think that their thinking is slightly muddled? One, I was a loyal customer for over ten years. Two, I never made a payment late (and this is despite having suffered a long run of unemployment). Three, I had the same three credit cards for the last decade; I had enough credit that I did not need any more credit cards. Basically, I am a good customer.

By the way, Citi also thought so. Earlier this year, Citi had increased my credit limit. Is there any greater proof of muddled thinking than cancelling my VISA card shortly after increasing my account limit? On second thought, Citi's thinking as a company is not muddled; it is downright schizoid.