Consumer complaint received 2020-07-09
Company: CITIBANK, N.A.
State: NY
Product: Credit card or prepaid card
Sub-product: General-purpose credit card or charge card
Issue: Advertising and marketing, including promotional offers
Sub-issue: Confusing or misleading advertising about the credit card

Complaint:
This is a general complaint about the deceptive interest charges and misleading information from Citi reps regarding a 0 % balance transfer on a Citi Double Cash Card. 

During the pandemic I lost my work and was looking for ways of holding on to cash reserves. I was offered a 0 % balance transfer on this card. I looked into the terms and straight away I realized that it is in fact 3 % interest paid as an up-front " fee '', which is deceptive at best. In this case I decided that it was acceptable. 

I read the fine print that stated that if you continue to use the card in any way, that there is no interest free grace period on new purchases and you will also be charged interest on the balance transfer. To me this sounded absurd, so I thought I must have misunderstood it. 

I should have just taken that on face value and moved on, but I called Citi to confirm the language. I was told by the rep that the monthly statement would break out the purchases vs balance transfer along with what interest was applicable on each, and as long as I paid for the purchases within the statement cycle that I would not be charged interest. 

Band on this information, I went ahead with the transfer for the amount {$1600.00} and I made purchases for {$280.00}. I received my first statement in XXXX and it said I had no interest charge on either balances or purchases. It said there was a balance subject to interest of {$300.00}, and in the column next to it there was zero interest charged. I paid the full {$300.00} as I assumed that to be the balance I should pay to avoid an interest charge according to what the Citi rep told me before and according to the statement itself. 

On my next statement I had {$390.00} in new charges and I was charged {$3.00} interest from the previous month. I called Citi for clarification and they waived the interest. The new statement said " balance subject to interest '' was {$280.00} which I now realize months later when reviewing the statements again, was for the first month 's statement plus interest charged ( $ XXXX+ {$3.00} ) - not for the current billing cycle. At the time I used this information to work out what I thought my payment should be. This was because of what the first Citi rep said about the way the balance was broken out on the statement, before I even took the balance transfer offer. On the current call, I asked them what amount I was meant to pay to avoid an interest charge for the new statement cycle, in the same way as with every other credit card I've ever had. The Citi rep needed to do a calculation that took a few minutes. The amount was $ XXXX which I promptly paid rounded up to {$830.00}. I did not know why this figure was so hard to calculate and why it was not on the statement. Inhindsight I can see that it was all the current statement charges plus the latest charges before the new statement was issued. 

When I got the next month 's statement for {$440.00} new purchases ( 98 % already paid ), I had been charged interest again despite what the Citi rep told me each time. This time I was charged {$6.00} interest on standard purchases. I called Citi again and explained that I was assured that the last balance I paid meant I would not be charged interest. This rep was the first person to say, months later, " there is no interest free grace period on purchases with this card '' ( I believe that is only the case with balance transfers ). If I had been told this clear language right form the start when I spoke to Citi then I could have made an informed decision and to be honest it doesnt contradict what I read in the terms and conditions. Although it would have been more clear if the terms and condition specifically said there was no 30 day interest free grace period. 

I have never heard of a card like this with no 30 day grade period. As of now I'm no longer actively using the card until I've paid off the balance transfer, then I will close the card. Although the interest I've paid is not that much, it's despite my best efforts to comply. Ive been charged interest again because I forgot to cancel a recurring payment, but as of now the card will remain dormant until the balance transfer is paid off. 

In summary, for monthly ( not annual ) charges in a historically low interest rate environment, I was charged 1.2 % interest on purchases in the first month and 1.7 % in the second month, which pretty much cancels out the 2 % cash back benefit touted by this card. The next month I also received a XXXX minimum interest charge on a {$10.00} recurring purchase I forgot to cancel, which works out at 4.8 %. 

I believe that the sum of this behavior by Citi is predatory and deceptive, especially during a pandemic. They get their pound of flesh up front with a guaranteed 3 % immediately on the full initial balance transfer, a decent return for them considering Fed interest rates are currently zero. And then they continue to nickel and dime customers from that point on, by obfuscating information for interest charges and payoff figures on the statement. 

On top of that, the Citi reps do not generally appear informed on exactly how the interest charges work, and the story shifts depending on who you speak to. There are others who are more financially vulnerable than me who would be utilizing these card to a greater degree and be more reliant on them. They would probably not expend as much effort as I have digging into what is going on with the charges, and those are the people Im more concerned about rather that my own individual experience.

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