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%.

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. Continue Reading »

Citibank recently raised the fee it charges credit card users for cash advance transactions to 5% with a minimum fee of $10. This move is not surprising, as banks have been raising cash advance and balance transfer fees since the start of the Great Recession.

The 1 percentage point increase by Citibank puts its cash advance fees on the same footing as Discover and Chase, who also charge 5% cash advance fees. Bank of America charges a 4% fee.  American Express and Capital One currently charge 3% fees which are the lowest among the major credit card companies.

In 2008, most major credit card companies charged 3% cash advance fees. By 2009, 4% fees became the norm. Now that Citibank has upped its fee to 5%, American Express and Capital One may follow suit. And there is still room to maneuver, as there is no government mandated ceiling on what banks can charge for either cash advances or balance transfers. Continue Reading »

Credit card companies are becoming increasingly generous with 0% balance transfer offers.  A year ago, the longest 0% balance transfer offers lasted between 6 and 12 months.  Today, it is possible to get a 0% APR for 18 months on balance transfers and purchases.  While only one major credit card company is offering these long 0% introductory periods, it is quite possible other credit card companies might follow suit.

Currently, the longest 0% balance transfer deals come from Citibank.  At 18 months, these deals are 30% longer than most competing offers.  A person who transfers $5,000 from a credit card with a 14% interest rate and qualifies for a 0% for 18 months can expect to save over $1,000 during the introductory period.  This is nearly $400 more than could be saved with a 0% for 12 months. Continue Reading »

Recent feedback left by visitors of Smart Balance Transfers regarding new annual fees on Citi credit cards is providing a clearer picture of the situation.  At present, visitors are reporting that the annual fee is $60, is due to take effect in April, and that they have low balances on the card and very high credit scores.

As noted in an earlier story about Citibank annual fees, the annual fee may be credited to certain accounts if spending is sufficiently high on the card.  However, many people have reported that they intend to close their accounts rather than pay the annual fee. Continue Reading »

In a move that will likely be replicated by its competitors, Citibank has begun charging annual fees on some credit card users.  The new annual fee, according to a source who has received notice, is $60 and can be credited back if enough money is spent on the card over the course of a year. Continue Reading »

Dear Mr. Pandit,

I would like to bring to your attention a matter which may have escaped your purview.  In October of 2009, your company sent opt out notices to certain credit card holders.  Recipients of the letter were given two options:  close their credit card accounts and maintain their current interest rate or keep their accounts open and pay 29.99% interest, a punitive rate generally reserved for consumers who default on their payment obligations.  It is my understanding that consumers who failed to respond by the designated opt-out date would automatically have their rates increased.  Continue Reading »

In mid-October, comments started flooding in from Citi customers that received interest rate increases from Citibank to as much as 29.99%.  During the following weeks, over 100 comments were posted from justifiably angry customers, many of whom had great credit and long relationships with Citi.  At the time, I was happy to see that people were opening their credit card mail and using balance transfers or opting out to avoid these monstrously unfair rate increases.  However, my concern was for the people who accidentally failed to read their opt out letters.

Yesterday, the first comments started to come in from people who missed the opt out deadline.  My fear is that many, many more people will be commenting.  Unfortunately, opting out is likely no longer an option.  In rate increase letters I have reviewed, the opt out date was November 30th.  This means that many people are just receiving their first bills with 29.99% interest rates.  And some who pay online or don’t examine their statements closely may not notice that they are being charged this absurd interest rate for months. Continue Reading »