Consumer complaint received 2017-08-07
Company: CITIBANK, N.A.
State: CA
Product: Credit card or prepaid card
Sub-product: General-purpose credit card or charge card
Issue: Fees or interest
Sub-issue: Charged too much interest

Complaint:
I have been a BestBuy Credit Card holder since XX/XX/XXXX. During this time, I have spent thousands of dollars on the card, which have included various deferred interest or same as cash transactions varying from 6-months to 24-months terms depending on the amount of the purchase. The card was originally a store-only credit card ( could only be used to purchase @ BestBuy ), but later became a VISA when CITI became the new issuer of the card in XX/XX/XXXX. A new card was mailed to me and I continued using it the same way itd been used in the past, including making regular purchases as well as deferred-interest purchases and always paying additional amounts ( besides the minimum payment ) to lower the oldest purchase on the card. The card has always been paid using automatic payments through my banking institution. The automatic payment has been at least three and in some cases four times the minimum amount due in order to cover the minimum payment and the additional funds to be applied to the oldest transaction in order to lower the principal balance and reducing the amount of accrued/deferred interest. In this particular case, a transaction on XX/XX/XXXX with an original purchase amount of {$2200.00} made on a 24-month no-interest WITH PAYMENTS promotion, resulted in an accrued interest amount of {$1400.00} added to my account when the promotion expired on XX/XX/XXXX. This interest is over 65 % of the original purchase price!!! I became aware of this situation when I received an email from the bank stating that my minimum payment was way over what Im used to it being. I proceeded to contact the bank on XX/XX/XXXX to figure things out and, in short, was told that a promotion had expired on XX/XX/XXXX and the large sum of accrued interest had been added to my account making the minimum payment jump drastically. I was further told that there was nothing the bank would do and that basically, I was stuck with it. The bank helped out by reversing a late-payment fee for {$27.00} and an interest adjustment was also made for a different promotion. I offered the bank to pay off the balance of the expired promotion for the purchase on XX/XX/XXXX and have the interest removed or lowered, but it was not accepted. I also told the bank that I 'd send money immediately to pay off two other promotions which would expire on XX/XX/XXXX and avoid deferred interest from hitting my account, this was accepted and I complied. After the call, I downloaded every statement available of my account to figure out why the accrued interest was so much and it was then when I realized that no additional amounts were ever applied to the promotion in question. The statements are all attached for your review. My statements show how additional funds ( after the minimum ) were applied to various promotions always leaving the longer-term balance intact. Lets remind everyone that these longer-term promos are attached to minimum purchase amounts. The bigger the amount, the longer the bank offers you to pay it off with no interest. That also means a much larger amount of deferred interest being accrued banking on the possibility that either the promo expires or the customer is unable to cover the entire amount of the purchase prior to its expiration or both. This is why the additional funds were to be applied to the oldest, largest purchase. The statements also show that, although the promotion clearly states 24-month no interest WITH PAYMENTS, the bank did not set a minimum monthly payment. This would have also ensured that the principal was being paid down every month. In one case, the bank did assign a minimum monthly payment to one promotion but not in any of the other promotions. The statements have a column for Promotion Minimum Payment Due, but none were assigned for purchases over {$25.00}. How does this work? I am disputing why the bank did not apply the additional funds to the oldest transaction as instructed. This obviously allowed the full balance on a high-balance purchase to be eligible for a high 25 % APR to be applied for the 24-month period resulting in this exuberant amount of interest. On XX/XX/XXXX, I contacted the bank again and spoke to XXXX. I asked that my account balances be recomputed and these additional funds received by the bank for the 24-month period be applied to the XX/XX/XXXX purchase retroactively so that the principal amount decreases every month and so would the accrued interest. I realize that there were other promotions to which monthly payments were applied in full during the last two months before expiration ( as required by law ), but the rest of the months would significantly reduce the total amount eligible to accrue this high APR. While this would not change the fact that the promotion expired, the total amount owed as deferred/accrued interest would be much smaller and easier to deal with. Candices response was that the bank did not know about my instruction but that even if the bank had applied these funds as requested, the accrued interest is always on the original purchase price and, if the promotion expires and an amount is still owed even if its {$100.00}, the FULL amount of interest would then be charged to the account!!! This is totally inaccurate information being provided by Customer Service. My statements show how the amount owed on a promotion decreases as additional funds are applied and thus the deferred/accrued interest is in fact reduced. On occasions where other promos expired, the amount of interest actually debited to my account was what was due then, not the entire amount of interest that would have been accrued if the balance had not been reduced over time. In my opinion, this was either lack of training on the banks part or simply the bank 's unwillingness to help its customers. 
Lets not forget that my account is now accruing interest at a very high APR currently@25.24 % ( variable ) which will include the {$1400.00} charged as deferred interest ... so now Im expected to pay  interest on top of interest! And all of this is happening with a XXXX FICO score!!! I asked XXXX about having my account reviewed for potentially lowering my APR to help minimize this crisis. I mentioned that I also have another card with the same bank at a much lower APR. To no avail She told me that its at the banks discretion and that the bank would never lower my APR on this account. This is very confusing considering my good FICO score, the constant, automatic credit limit raises and my much lower APR on my other CITI card! Since my contact with the bank, I have submitted XXXX payments totaling {$570.00} to cover minimum payment and two promotions due to expire on XX/XX/XXXX to avoid additional deferred interest from hitting my account. While it was a struggle to get the bank to apply the monies correctly, the funds have been finally applied as I requested and my only outstanding balance is the transaction from XX/XX/XXXX plus its accrued interest. The way that Best Buy Credit Services opted to applied the funds in excess of the minimum payment towards my deferred interest promotions clearly exemplifies a business practice which appears to be aimed at maximizing profits and making it hard or next to impossible for consumers to pay off these type of promotions.

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 explanation