Ok. Let me begin this story by saying that I really like my Citicard Credit Card for two reasons
- Virtual Account Number — generate a temporary account number to use for online shopping.
- Cash Back — I spend a lot on my credit card, so the cash back is nice instead of stupid points or air miles.
But here is just what happened to me that I can not describe in any other way than predatory lending practices.
So last year I used Western Union to transfer money for a business transaction. I don’t ever use Western Union, but for this specific venture, the customer only accepted Western Union so I had no choice. At that time, I remember thinking that it was nice Western Union allowed me to send money using my credit card through the website. Great! Very convenient.
Little did I know that the Western Union payment got billed to my credit card as a Cash Advance. Ok, now this is getting dangerous. I know EXACTLY what a Cash Advance is. I see people do it all the time at the casinos. Deadbeats would burn through their bank roll, but because they have no self control, would walk to the ATM and start pulling money out of their Credit Card, usually at ludicrous interest rates like 20% and up.
I am not going to blame Citicard for this. I blame myself for not being aware of the situation, and failing to catch any warning that may have popped up. I also want to blame Western Union for not being more proactive in notifying users of this type of transactions.
However, what happened next is without a doubt CitiCard’s fault.
Just about every month, I pay off my credit card in full. Technically, if you pay off your credit card in full, you do not have to pay any interest. But I began noticing on my statement that every month I get charged an interest. At first, I thought it was a fluke. Perhaps I am behind on one of my payments, or they are charging me interest accrued from the statement date to the payment date. Who knows. It did not bother me much because it was only a small amount, and I thought if I continued to pay my balance in full every month, closer to the date of the statement, it would take care of itself.
I did this for several months, but then I got suspicious that it was not going away. So I called Citicard to ask them to look into it and tell what is going on. The first operator I spoke to, DID NOT know and could not explain to me why I was being charged interest. Ok.. so let me step back for a minute… Some of you credit “experts” may have read the paragraph before this and thought I was just an idiot who did not understand how credit card interest work, and you were going to dismiss my complaint as “uninformed consumer bitching”, but let me beg you to reconsider. You see.. even the Citicard Customer Service Rep couldn’t explain to me what the charge was about. So, its not just me. In the same vein, they were not the one who told me that it was my Western Union transaction that was the offender. I figured that out for myself after combing through my statements. Up until that date, I really had no idea the Western Union charge was any different than my other credit card purchases.
To add insult to injury, the Citicard Rep did not know how I could fix the problem. They did not know what I am supposed to do to stop the interest charge. They said they would look into it and get back to me!
So a month go by and I get charged again. Now the total charges have equalled well over $50. A small amount in the scheme of things, but a huge headache in other respects. I called them again. This time a more knowledgeable Citicard Rep. helped me look into the problem. But even though this person seemed more knowledgeable, they still could not figure out the offending charge until I mentioned the Western Union transaction and provided the date which it occurred!
Ok.. whatever… I am just glad they found the problem. Now tell me. How do I fix it? Well, the answer is this. I have to pay my balance down to $0. Yes, pay my balance down to $0. If I do not pay my balance down to $0, the Cash Advance charge that accrued on my account MONTHS ago, would NOT be paid for. It will continue to hang around on my account and collect interset FOREVER.
Ok ok ok… Some of you are wondering, wait, you said you pay your account off in full every month. So what’s the problem? The problem is, paying off my “statement balance” in-full DOES NOT zero out the account. To zero out a credit card account, you have to pay whatever amount that is owed on it up to the minute you paid it. So sadly for me, because I use my credit card for everything, my account balance is never ever zero. Look, if you don’t understand what this means, I don’t have the time or expertise to explain it to you. Just trust me when I say that MOST people never pay their credit card down to zero. When you pay your “statement balance”, you are only paying a portion of your actual balance.
But back to my point. Citicard’s business rule made it so that I was perpetually STUCK in a cycle of paying interest for a charge that I thought I already paid off. Although I received a statement every month telling me how much I owed, and I dutifully paid it off, they failed to explain to me that it would not pay off my “cash advance” balance. It is also upsetting to me that although I paid my statement balance in full, they do not count that payment towards my “cash advance” balance for God knows what reasons.
Although I am told zeroing my balance would resolve the problem, I have no confidence that there will not be some other predatory rules to hold me hostage. Some possibilities I could think of includes
- I have to hold my balance at zero for a certain length of time, maybe 24 hours?
- I have to zero my balance the second the statement is issued
- Or maybe they expect me to Zero my balance, then OVERPAY the amount I owed in the “cash advance” column.
Moral of the story is.. I will be shopping for a new credit card. I have even considered going all cash — but that’s really far from possible at this moment.