Consumer complaint received 2024-07-29
Product: Credit card — General-purpose credit card or charge card
Issue: Advertising and marketing, including promotional offers — Didn't receive advertised or promotional terms
Company: CITIBANK, N.A. (IL)

Citibank AAdvantage Card Overcharges Interest and Refuses to Correct it Summary I had 0 % on purchases that expired XXXX XXXX, XXXX. I also had a " flex loan '' with a 7.99 % interest rate. In XXXX last year I wanted to pay off the purchases to avoid the interest rate jump. A Citibank agent told me on XXXX XXXX to make the payment on XXXX XXXX as they apply payments to the higher interest rate product first. I did that. However, they applied the payment ( of more than {$10000.00} ) to the flex loan instead of the purchases with the now higher interest rate. They have refused to correct this. 
Part XXXX In XXXX, XXXX I took advantage of XXXX offers on my Citibank AAdvantage credit card. XXXX was a {$12000.00} Flex Loan with an APR of 7.99 %. The other was a 0 % APR on purchases to expire on XXXX XXXX, XXXX, after which time the rate would jump to over 25 %. 
As the XXXX XXXX date was approaching, I decided to pay everything I owed on purchases to avoid the jump to the high interest rate. My purchases amounted to about {$10000.00}, and I wanted to pay the purchases specifically, but I didnt see how I could designate that payment to be applied specifically to the purchases, rather than the loan. 
Before XXXX XXXX I called Citibank AAdvantage to discuss how I could make sure my payment would be applied to the purchases that would be subject to the high interest rate, and not the loan. 
The agent I spoke with explained to me that I should not make that payment right now since XXXX policy is to apply payments to the product with the higher interest rate. The agent clearly explained to me that if I made the payment then, before XXXX XXXX, that payment would be applied to the loan, since at that point it had the higher interest rate of 7.99 %, as opposed to the purchases, which, at that moment, still was under the 0 % promotional offer. 
The Citibank agent specifically advised me to wait to make my payment on XXXX XXXX, after the 0 % XXXX expired the previous day so that the payment would be applied to the purchases and not the loan. 
This made sense and I was glad I called to ask about it before I mistakenly sent in my payment too soon. 
I did exactly what the Citibank agent told me to do and made my payment of {$10000.00} on XXXX XXXX. 
I didnt actively use that card and had it set to autopay. 
When I checked my account again a few months later I realized Citibank had misapplied my XXXX XXXX payment to my Flex Loan with the low 7.99 % interest rate, and the balance that remained on my account was for purchases with an XXXX of 26.24 %! 
I called Citibank on XX/XX/XXXX about the problem and spoke with an agent named XXXX. She said she saw that I'd called on XXXX XXXX and that I had been advised to make the payment on XXXX XXXX. XXXX told me she would put in a request and that Id hear back with a decision, either via email or a physical letter. I was relieved to know they had records of what the agent advised me of on XXXX XXXX and was thus confident this problem would be rectified. 
However, all I received was a one-page form letter that simply explained, Each month 's minimum payment due is applied in the following order : XXXX. Past due amounts ( if applicable ) XXXX. Current interest charges XXXX. Principal balances in Annual Percentage Rate ( APR ) order from lowest to highest Please note that payment amounts greater than the minimum due are applied to balances with higher APRs before balances with lower rates. 
Therefore, we are unable to apply your payment as requested. 
My {$10000.00} on XXXX XXXX, XXXX was way over the minimum payment due and thus should have been applied to the higher XXXX, which was, on XXXX XXXX, XXXX, the purchases. 
I called back on XX/XX/XXXX and spoke with XXXX XXXX sp? ) who explained how it works, which was what the agent told me on XXXX XXXX. She said they apply payments to higher interest rates so I would have needed to wait for the promo to end. I said that was exactly what I did. 
Then she put me on hold XXXX or XXXX times and came back with a completely different story. Now she told me that I needed to wait until it billed, but she was going to request another review because of what I had been previously told. 
I received another letter dated XX/XX/XXXX, which was the exact same letter they previously sent me on XX/XX/XXXX. 
It said nothing about needing to have waited until the statement closed. 
I called again on XX/XX/XXXX, this time asking to speak with a supervisor. I spoke with XXXX. He also told me the information the agent gave me in XXXX was incorrect because I would have needed for the statement to close, but not to worry, he would have it fixed in XXXX to XXXX business days. He said XXXX remove the payment I made on XXXX XXXX that was applied to the Flex XXXX and apply it to the purchases, and theyll reinstate the Flex XXXX. He said it would be reflected on my next statement to be issued on XX/XX/XXXX. He also said in the future, whenever an offer expires, wait until the next statement to pay it. 
However, I received another letter dated XX/XX/XXXX, which was again identical to the XXXX previous letters, and when I checked my XXXX statement dated XX/XX/XXXX, no adjustment had been made. 
Again, these letters state they apply payments above the minimum balance due to the higher interest-bearing product, but thats not what they did, and state nothing about needing to wait until the statement closes. 
I called back again on XX/XX/XXXX, again asking to speak with a supervisor whose name was I think XXXX. He told me this case was closed. It had already been escalated XXXX times and that was the end of it. I asked who decided that and he said it was the XXXX Department. I asked to speak with that department and he said they dont take calls. I said this is unacceptable and I needed to speak with someone. He said he would have his supervisor XXXX call me, but I never received a call. 
I also asked on different occasions asking about the terms of the Flex Loan but nobody had access to it but that I could find it online, but the only link I had to it didnt work. 
Whats more, there is an XXXX charge calculation on my statements that shows the interest charge for both the Flex Loan and purchases. 
Under that it states, We apply any amount you pay above your XXXX XXXX XXXX first to the balance with the highest XXXX, then to the balance with the next highest APR, and so on. As a result, if the XXXX for a Citi Flex Plan balance is higher than the XXXX of other balances on your Account, we will apply the amount above the Minimum Payment Due first to that Citi Flex Plan balance, and then, after that Citi Flex Plan balance has been paid in full, to the other balances. This will cause you to pay off that Citi Flex Plan balance before the end of its repayment period and XXXX result in an amount remaining due on your next billing statement for the other balance, increasing your XXXX XXXX XXXX on your next billing statement. 
This is consistent with what the agent told me on XXXX XXXX. It states nothing about needing to wait until the statement closed. 
What was also very clear was that my 0 % rate on purchases expired on XXXX XXXX, after which time the rate would jump. 
From XXXX written policy on its statements, what the Citibank agent told me on XXXX XXXX, and the XXXX subsequent denial letters Citibank sent me, my XXXX XXXX payment should have been applied to the high-interest purchases! 
Additionally, also regarding Citibank agents claims that I needed to wait until the statement closed, this contradicts their policy printed on my statements which read : How to Avoid Paying Interest on Purchases. Your due date is at least 23 days after the close of each billing cycle. We will not charge you interest on purchases if you pay your monthly Citi Flex Plan Payment Amount ( if any ) plus your New Balance, excluding any Citi Flex Plan balances, by the due date each month. 
It says by the due date. It doesnt say I have to wait until its billed or the statement closes. 

Part XXXX This wasnt the first time Citibank AAdvantage misapplied my payment, in contrast to their very own policies. 
When I took the 7.99 % Flex XXXX in XXXX XXXX, the terms of the loan were XXXX scheduled payments of {$240.00} per month. 
As I was informed, this payment amount would be included in the minimum payment due, which I scheduled. 
In XXXX, XXXX, when I accepted the 0 % on purchases offer, and took the 7.99 % Flex XXXX, I decided to pay off my existing purchases up to the moment the XXXX percent would take effect. 
My balance on my XX/XX/XXXX statement was {$590.00} with the payment due on XXXX Additionally, I had subsequent purchases I also wanted to cover before the 0 % XXXX took effect, that would be reflected on the XXXX statement amounting to {$210.00}, for a total of {$810.00}. I paid {$840.00}. 
Instead of applying that payment to the existing purchases, with the higher interest rate as they supposedly do, Citibank AAdvantage put that payment toward my Flex Loan with the lower interest rate and began charging me 25.49 % interest on purchases even though this payment was made exactly on the due date! 
I had to call and deal with the frustration of this mess then as well and it doesnt appear the problem was actually fixed. 

After that on my XX/XX/XXXX statement Citibank amended my agreement writing, If we incorrectly apply a payment or credit to your Account, make an incorrect payment or transfer of funds to you or an Authorized User or anyone else on your behalf or on behalf of an Authorized User, or make any other error regarding your Account, you agree that we XXXX correct the error. We XXXX correct the error by making adjustments to your Account, requiring you to repay us for any incorrect payments, credits or transfers, or taking other actions we determine are appropriate to correct the error. You agree to cooperate with us to correct any of these errors. 

I was careful to follow Citibanks policy, even taking care to call on XXXX XXXX last year to make sure I was doing the right thing and following the directives of the Citibank agent. 

On XX/XX/XXXX I mailed Citibank a letter explaining all of the above to give them a last chance to correct their mistake. 

I received a letter from Citibank dated XX/XX/XXXX, which stated the same information as the XXXX previous letters about how they apply payments, but this time added another additional text which read, If a promotion ends between statement cycles, payments will post as they are received according to the paragraph above. you will need to wait until after the next statement prints after the promotion has ended, before your excess payment will apply the way you want it to be. 

Your payment ( XXXX ) were applied correctly when they were received in XXXX. 
The Credit Card XXXX of XXXX requires that any payments made in excess of the minimum due must be applied to balances in the order of highest to lowest rate of interest. In order to ensure that Citi is in compliance with this law, we regret to inform you that we are unable to fulfill your request. 

This was the first time I saw this in writing and is the antithesis of what their agent told me on XXXX XXXX, XXXX, when I was specifically told to make my payment on XXXX XXXX, which Citibank knows and has acknowledged. 

I had previously asked a number of times where I can see the actual agreement for the loan but no agent I spoke with had access to it. I was told I could find it online but the link I was sent produced an error message. 

What is the point of having a date the 0 % promotion ends? I made my payment after that date, again, as specifically instructed by a Citibank agent. But Citibank did not apply that payment to the higher interest rate product. As they stated above, The Credit Card Act of 2009 requires that any payments made in excess of the minimum due must be applied to balances in the order of highest to lowest rate of interest.