In early July, I posted a consumer advisory on balance transfer checks. At that time, I had received a few emails from consumers complaining about Citibank balance transfer checks that were not being honored. When I published the first advisory, I had expected a flood of new comments from angry consumers. When those complaints didn’t arrive, I assumed the issue was over. It isn’t.
Yesterday, a visitor named Patti posted about her recent Citibank balance transfer check problems. Here is her story:
“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 transfer 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 continuously 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 The CSR stated, as well as the manager I finally talked to, that the offer was being rescinded and that my check would not be honored.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.”
Fortunately for Patti, she was able to avoid penalty fees by contacting her other credit card companies before the balance transfer checks bounced. However, Patti had to spend a great deal of time sorting out the issue and, had she not reacted quickly, she could have easily been hit with bounced check fees. Had she sent these checks near her due dates, she might have been hit with bounced check fees AND late fees, which could have cost her in excess of $100.
While it seems reasonable to assume that a high percentage of Citibank balance transfer checks won’t bounce, the possibility that they will is very real. Because of this, the only way to avoid hassles and potential fees is to shred these checks the moment they arrive in the mail. If you are looking to save money with a balance transfer, contact your credit company and request a transfer over the phone or apply for a new 0% balance transfer credit card. Both methods will help you avoid bounced check headaches.
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August 18th, 2010 at 10:47 am
A visitor named Lucia posted on the credit card complaint page that her checks were honored, but charged a cash advance rate due to the way she used her check. In her situation, Citibank actually treated her fairly. You can read her credit card complaint here but the moral of the story is that if you stand up and complain to credit card companies, you can often get a solution that is fair.
September 15th, 2010 at 9:14 pm
Discover transferred a balance of 5300 on 7/2/10 for 0% for 15 months…..my credit score 730.
Received an email today that they “made a mistake” and are rescinding the offer but will cover me at 0% till 2/11. Intend to call first thing in morning to object in a big way. More to follow
September 16th, 2010 at 9:27 am
Kathleen,
I would greatly appreciate it if you came back and shared what happened, as this is the first such complaint I have ever heard about Discover. Did you use a balance transfer check or do your balance transfer online or by phone?
October 15th, 2010 at 3:21 pm
I just got this response from Kathleen via email: Getting back to you on that balance transer issue i had with Discover. It seems they were adjusting the 6 months intro rate on PURCHASES not transferred balances. They actually gave me an extra month for purchases and my balance transfer offer remains 15 months at zero percent. I misunderstood the letter and am very happy with the resolution.
Looks like Discover remains the best credit card company.
December 21st, 2010 at 3:58 pm
We received those same offers from our bank. 3 or 4 times. My wife was recently laid of from her job, She’s been stricken with a severe case of arthritis as well depression. We are living off of her unemployment check because I had to leave my job to take care of her. We had no balance to transfer to start with and in a fit of desperation she deposited a check into our account in an amount way way over any balance we might have had (Thinking it was free money, “Use it any way you want…”). To make a long story short I paid some bills believing the funds were good and now we’re getting threatening letters from the bank. I would like to sue for false advertising. Is that possible? Is it prudent?
December 21st, 2010 at 4:17 pm
Bert,
First off, I am so sorry to hear about your wife. I hope she finds a good doctor who can help her. I know from experience how painful arthritis can be.
As to your dilemma, these checks are very tricky. Most companies state that they reserve the right not to honor them, so they can basically do what they want. I think you can make a compelling case to your bank about dropping any fees-ask for a supervisor and be as nice as possible-but I don’t think you have any legal recourse. This is just an opinion, but the credit card companies are pretty well covered in the legal department for situations like these.
June 15th, 2011 at 9:45 am
On June 15, 2011 I received notice from Citi (Universal Card):
“Check number xxxxx in the amount of $x,xxx.xx has been returned as unpaid because you no longer qualify for this check offer.”
The check amount was well under my remaining credit and the terms on the check said that it needed to post prior to June 30, 2011– which it did. I doubt the check was more than a week old as I’ve been getting promotional mail from Citi at least once a week.
I immediately called when I read the above notice and the CS rep said “yeah, that can happen”. My available credit had not changed. Citi offered to reimburse for penalty fees on the other end. We’ll see if that actually happens.
June 15th, 2011 at 11:13 am
David,
Thanks for sharing this. I was recently challenged by a visitor who thought my stance on balance transfer checks was incorrect, but hearing of one incident like this is enough to reassure me that I am correct in strongly advising against using them. I’ve had complaints about this from consumers at just about every major bank, so it is an industry wide issue and not just one company.
June 15th, 2011 at 11:46 am
At the time I wrote the check, the Citi website actually produced low-level error screens any time I attempted to access any page that referenced balance transfers. This included the balancetransfer.universalcard.com address advertised along with the paper check mailings. I assumed that the offer was coming to a close. That’s why I used the paper check. It’s possible that there was some global technical problem.
The Citi balance transfer pages reappeared with a ‘new’ offer sometime after the paper check was refused. The new offer is identical except for an extended deadline. There’s every indication that I could reinitiate the same transfer today. However, I’m going to wait for the first transaction and penalties to be resolved.
June 16th, 2011 at 10:38 am
David,
I would advise avoiding the checks altogether and calling in your balance transfers. This approach should eliminate the possibility of bouncing balance transfer checks and give you more peace of mind.
July 17th, 2011 at 5:21 pm
Hi,
I was sent two balance transfer checks (use any way you want, 0% for some period of time)by Citibank. I have the AA Advantage card. I am not anywhere near my credit limit and I always pay the bill on time. I used the checks (for $100 and $400) and they bounced from my bank account, causing me to incur $12 per check fees. When I called Citibank, they said this wasn’t because of a credit check (if they said it was, I think I could have asked for a free credit report), but didn’t really explain what the reason was. They did offer to credit me $24 for my bounced check fees. So this definitely can happen and it must be in the fine print. I have “good” credit, as of the last time I looked. My husband and I are steadily employed (very lucky), but have had to support adult children who can’t find jobs. So it can happen–beware the credit card checks.