Consumer complaint received 2024-02-22
Product: Credit card — General-purpose credit card or charge card
Issue: Problem when making payments — Problem during payment process
Company: CITIBANK, N.A. (GA)

On my XX/XX/XXXX Citi credit card statement, I had XXXX balances with differing APRs : {$250.00} at my standard purchase APR of 26.74 %, {$930.00} at a promo APR of 3.99 %, and {$3800.00} at a flex loan APR of 9.99 %. On this statement, underneath the promo rate balance, it states : " Promotional Rate Expires XX/XX/XXXX, '' wherein the {$930.00} would be moved to my standard purchase APR. On XX/XX/XXXX, I made a payment of {$150.00}, about half of the minimum payment due. On XX/XX/XXXX, my transaction history shows that {$860.00} was moved from the promo APR to the standard purchase APR. In an attempt to pay off the rest of my minimum payment plus the entire standard purchase balance which I now believed to be about {$1100.00}, I made a payment of {$1300.00}. This payment was made in good faith, based on their policy as well as the Credit Card Accountability Responsibility and Disclosure Act of 2009 which states " Upon receipt of a payment from a cardholder, the card issuer shall apply amounts in excess of the minimum payment amount first to the card balance bearing the highest rate of interest, and then to each successive balance bearing the next highest rate of interest, until the payment is exhausted. '' Immediately after making the payment, my Citi app showed my flex loan balance reduced to {$2500.00}, meaning the payment was allocated to a balance with an APR of 9.99 % rather than my standard purchase balance with an APR of 26.74 %. When I called that day, the Citi representative I spoke to ( and several representatives since ), have told me that I must wait until the statement period closes in order for their " system '' to understand how to properly allocate the payment. This seems at odds with the fact that their system understood to move my promo APR to my standard purchase APR in the middle of my billing cycle. This means that Citi would have charged and collected interest on that balance between XX/XX/XXXX and XX/XX/XXXX. In any case, that representative forwarded a request to a team that issued a refund check to me in the amount of the excess payment, {$1100.00}. The amount was charged back to my account on XX/XX/XXXX, and as of today, XX/XX/XXXX, I have still not received that check in the mail. For the record, the refund was not because a refund was what I wanted, but because I believed Citi could not reallocate the payment manually, and I had to a. wait to receive the check, and then b. remake the payment once my statement closed.

Today, I was able to view my latest statement. This statement now reflects a " new balance breakout '' of {$2000.00} as an Adjusted New Balance, and my Citi Flex Plan Balance is {$2500.00} ( an increase, with interest charged, but still reflecting the excess payment was allocated here ). In the interest charge calculation section, it states {$990.00} was subject to my standard purchase APR, {$450.00} at the promo APR, and {$3000.00} at the flex APR. I don't fully understand how this section was calculated. 

I spoke to XXXX Citi representatives today. The final person I spoke to said they put a stop on the refund check and are going to apply the {$1100.00} to my standard purchase balance. Perfect, that's what I always intended to do. That SHOULD satisfy my entire standard purchase balance. However, it seems somehow there may still be a leftover balance of {$890.00}, despite having made no additional purchases on the card. It's as if when they applied the credit charge, somehow that increased my standard purchase balance even higher than it was on the XXXX statement. The person I spoke to said they would issue a " request '' for a team to move this balance to my flex balance. This entire process seemingly will take XXXX business days. 

This solution could and would be fine. However, I still don't believe I should pay 26.74 % interest on any balance after XX/XX/XXXX when I made an excess payment to eradicate it that their system allocated incorrectly, and out of line with their policy and the law. It should not matter when the statement closes if what is communicated to me on my statement is that a. the interest rate on a balance will increase in the middle of a billing cycle, and b. that payments are allocated from highest to lowest APR.