Consumer complaint received 2021-05-25
Product: Credit card or prepaid card — General-purpose credit card or charge card
Issue: Other features, terms, or problems — Other problem
Company: CITIBANK, N.A. (IL)

We are Citi card holders and it has come to our attention that Citibank is not correctly following applicable federal law or Citis own stated policies regarding the application of payments. We have learned that this is how Citi systematically applies payments to all accounts and that its accounting department, including senior managers, are adamant in this systematic application. 

Specifically, federal law and Citis policies require that customer payments in excess of the minimum balance be applied as follows : -- To the balance with the highest interest rate -- If those balances are promotional balances with the same rate, to the balance that has the earliest expiration date. 

In our case, as shown in our XXXX and XXXX statements XXXX attached XXXX, Citibank did not follow these requirements. 

Specifically, it applied a large payment of approximately {$10000.00} to the promotional balance with the latest expiration date. Citi agents explained that this is because the payment was made between billing cycles, and that, the other promotional balance, which expired earlier and in fact had expired at the time the large payment was made -- as clearly shown on the XXXX statement -- and was charged a higher interest rate, was not billed on the statement. There is no such exception either to applicable federal law or Citis stated policy. Indeed, such an exception would allow Citi to avoid the law and its own policy, since it is unlikely that a customer payment would ever be made exactly on the single date in a month in which a billing cycle closes. Based on Citis agents ' statements, indeed, it is only if a payment is made on that date, and on that date alone, that it will apply the law and its policy. 

Moreover, Citis statements about the amount not being billed are not correct. In our case, the balance transfer offer transferred to the standard purchase rate on XX/XX/XXXX, a date that occurred prior to the date our billing cycle closed XXXX XX/XX/XXXX ), and so at the time that billing cycle closed, that amount was accruing a higher interest rate, and was clearly billed as such on the XX/XX/XXXX statement, which noted that the promotional rate had indeed expired on XX/XX/XXXX, and in the summary of charges, showed that the balance transfer that expired converted to a standard purchase. Therefore, since we paid that balance in full on XX/XX/XXXX -- 17 days after the XX/XX/XXXX statement, Citi should have applied that payment in full to that balance since it had -- at that point -- the higher interest rate. 

We are also concerned that very few, if any, other customers may be aware of the payment application rules and policies, monitoring their statements closely, or even if they are, would know how to or to be able to raise this issue after one or more customer contacts with Citi representatives. 

We attempted to resolve this issue with Citi through multiple calls and chats, including using Citi 's compliance hotline, to which we have not received a response. An " executive response '' unit has not responded, including not responding today as committed by a Citi representative.