A few days ago, a visitor of Smart Balance Transfers contacted me about an issue she had with a credit card check her fiance received in the mail. I have long cautioned against the use of balance transfer and cash advance checks, mainly because there is always a chance that these checks may bounce.
Below is Irina’s experience with a bouncing credit card check from Citibank. Fortunately, she did not incur great expense. However, anyone considering use of these credit card checks should think twice before using them.
From Irina:
1. My fiance has a credit card with Citibank. He is paying it off and has never incurred in default. His APR is about 7%.
2. At the beginning of June, he received an offer via mail. It was a set of 4 balance transfer checks with 0% APR til December, 2011 and 19.99% APR afterwards, with a 4% fee. In order to use them, he was supposed to call the bank and authenticate them.
3. My fiance saw an opportunity to get some credit card relief and make some payments and decided to take 3,000. He called and validated them. The executive that made sure of that told him that he could write the check to himself, go to a Citibank branch and get cash.
4. We did so on Wednesday, June 23rd, but the cashier refused to do it. She said they were to be deposited in a checking account or pay the credit card with it, which we decided not to do at that time.
5. We went across the street to a Bank of America and deposited a new check into my account. The money would be available on Friday, June 25th according to the cashier. We were a little upset that the executive had lied to us about the cash, but the 2 day delay was not a problem.
6. Next day, on June 24th, I checked my account online and the deposit appeared as “pending” and available on June 24th, but it did not appear on his Citibank acct. Therefore, he called another representative, told him what had happened and he assured him that there was not a problem and that it would appear within the next couple of days.
6. On June 25th, the money appeared on my account as Counter Credit, but we decided not to take it since it was still not appearing on my fiance’s acct.
7. On Monday, June 28th, situation was the same. He called to find out why it hadn’t appeared on his balance, and up to that point, he was told that the offer was no longer available and that he didn’t qualify. At that moment, the balance was still on my account. I called Bank of America to ask what the procedure was and while we were on the phone call, the funds were retired without incurring in any charges, there would have been a sea of them had I used the money according to the BA Customer Services agent .
8. My fiance kept calling and got ahold of a manager, who told him that the reason he had been denied was that the bank had called off the offer and decided that they could not afford it since June 8th, that he had thousands of complaints regarding the same offer and that there was a clause in the credit card terms saying that they can retract any balance transfer offer.
9. Today, he received a letter from the bank apologizing and saying simply that we was no longer eligible.
As you can see from Irina’s story, credit card checks can create numerous problems no matter how diligent one is in verifying these deals. The best thing to do with balance transfer checks is to throw them in the trash. Irina was fortunate to have not incurred fees. However, I fear others have been much less fortunate.
You May Be Interested In
- October 2011 Report on the Balance Transfer Credit Card Market
After a flurry of activity in the early parts of 2011, the balance transfer credit card market has remained stable for over four months. Average 0% APR introductory periods decreased [...]
August 15th, 2010 at 1:08 pm
I too experienced the same problem with these faulty Citibank checks. The biggest issue for me was that I received them not once, not twice, but THREE times and then I decided to take the bait and use them to pay off some small balances on other credit cards for some higher APR relief – especially since the offer stated the 0% was for 12 mos AND the balance transfer fee was only 3%, compared to 4 and 5% from other large credit card companies (i.e, Chase, Discover).
What ensued for a measly $1000 in BT offers was not worth the headache that I endured after this.
1). Sent out a check to a creditor for approximately $570 around 7/20.
2.) Sent out another check to a creditor for another $500 on 7/23.
3.) On July 24th, I received an email from Citibank stating that I should review a note in my account regarding my balance tranfer offer. Upon reading this note, it stated that the first check I sent out to a creditor was going to be rejected.
4). Called customer service and inquired why. I had over $4000 available to me in credit on the Citibank card and had been in good standing on my account since it was opened. (I would like to interject here that I have an EXCELLENT credit rating and continously monitor it monthly with a paid service through Experian).
5.) The CSR stated, as well as the manager I finally talked to, that the offer was being rescinded and that my check would not be honored. I then stated another check had been mailed the night before; would that check not be honored as well? Yes, they replied.
I was irate. I had worked very hard to build up my credit and credit reputation only to have citibank do this to me. I have a mortgage through them and have been a stockholder through one of their affiliates companies for YEARS.
Luckily for me, since I called both creditors (Chase and GE Money Services) BEFORE the bad checks actually hit the accounts, they were kind enough to waive the NSF fees. Citibank too offered to pay any of my NSF fees as well, if I would just take the time to copy all of my accounts that received NSF fees, fax all of them to them, and then wait for them to send me checks. Yea right – as a FT working mom of 2 kids, I have PLENTY of time to do this…and asked CITIBANK to reimburse ME for all of my time spent on the phone with them, Chase, and GE card services cleaning THEIR mess up. To which they replied they “…just could not do….”
Needless to say, I am transferring the remaining balance I have on citibank to another lower interest card. Haven’t decided if I’m going to bother keeping it.
Where are all the articles and bad publicity that should have followed with Citibank’s irresponsiblity to consumers????
August 15th, 2010 at 1:11 pm
P.S. I forgot to add, the rationale why Citibank was not honoring the checks was due to the fact that they realized they could not honor (afford?) the offers they sent out to consumers in May and June 2010, and that many customers were having these offers rejected now. It had nothing to do with credit ratings, customer standings, etc.
August 16th, 2010 at 8:29 am
Patty,
I am sorry to hear you had to deal with bouncing checks. I have been trying to bring attention to this matter, but no one seems interested. It really warrants attention, as your situation cost you a great deal of time and could have cost you money. I imagine others who have issues with Citibank balance transfer checks weren’t able to escape without incurring some penalties and other damages. This is really a despicable practice.