Consumer complaint received 2016-07-29
Company: CITIBANK, N.A.
State: MD
Product: Credit card
Issue: Late fee

Complaint:
I was charged interest for the next two months after paying my bill in full 2 days late. 

I paid my bill late in XXXX - admittedly my fault. I paid my XXXX statement in full on XXXX XXXX instead of XXXX XXXX ( 2 days late ). CitiBank charged me ( a ) {$25.00} late fee and ( b ) interest on both my XXXX and XXXX billing statement. I was charged interest in XXXX and XXXX - even though I paid these statements on time and in full. 

Apparently, Citi takes away your grace period and charges interest for the next two months after any late payment. Citi charged me a late payment fee, which I admit was my fault for paying 2 days late. I accept this fact, but note that {$25.00} for a two day late payment is quite a bit. I did not expect nor believe the reasonable consumer understands that if you make a late payment you then lose your grace period for two months - in addition to being charged a late fee. It seems like the late payment penalty should be enough, but then to charge interest and not honor my grace period on statements that I paid in full because of a non-related past late payment where the bank collected a late payment fee is a bit much. 

Who would ever think that in addition to a late payment fee, the bank also accesses another late payment penalty in the form of loss of grace period or interest -- even when the subsequent statements are paid in full. So, in essence the late payment penalty is not merely {$25.00}, but rather {$25.00} plus interest on whatever you charge in the next two months. 
This loss of grace period and additional interest charges while not directly related to my late payment are being accessed as an additional penalty. 

I complained to the bank first, because I believe it is appropriate to give the business a chance to respond prior to filing a complaint with a regulator. The bank did write me back and informed me that I paid 2 days late, so the late fee was appropriately charged. Okay, fair enough. Further, the bank tried to inarticulately explain grace period and interest to me. Its explanation is nonsensical in the context of my complaint about the bank taking my grace period for two months after XXXX late payment - even when those two months ' bills were paid in full and on time! 

How is this practice not the exact thing the Card Act attempted to prevent - e.g. gotcha fees like interest rate resets. This practice seems to be unfair, deceptive, and abusive - in my humble opinion. Consumers understand that if they do n't pay on time, they will be assessed a late fee and interest for the month that was not timely paid, but I do not believe any consumer understands ( whether disclosed or not ) that on top of a late fee, the bank will charge interest on the next two months of charges - regardless of whether you pay those statements in full and on time. Absurdly deceptive! 

I would like the supervision and enforcement office to investigate this practice.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with monetary relief