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December 5, 2016

Citi’s Credit Card Agreement Contains Another Nasty Ploy

Filed under: Finance — Edgar (aka MrConsumer) @ 6:01 am

In October, we told you about an unexpected move by Citi to let credit card customers opt-out of the mandatory arbitration clause in their credit card agreements. The catch: they required you to write an old-fashioned letter to them to do so. (See story.)

We heard from a reader, Daniel D., who says that is not the only dirty trick that Citi employs with respect to its arbitration clause. He said his bank account contract had a very similarly worded provision to this one in the new Citi credit card agreements:


Citi arbitration clause

What does this sound like to you? It sounds pretty positive as an additional way to avoid arbitration. It certainly gives the impression that the customer was free to go to small claims court system instead of being forced into arbitration.

And that is exactly what our reader did. He had a dispute with Citi over some late fees imposed despite his having overdraft protection. There was about $350 in dispute.

To his amazement, once he filed in small claims court, Citi requested the case be moved to a higher court. That action caused the case to no longer “stay in small claims court” and thus Citi could force him into arbitration.


Anyone reading the small claims court provision would come away with the understanding that it was the plaintiff’s decision to keep a case in small claims court and definitely not Citi’s. Implied in every contract is a covenant of good faith, and it certainly seems to be a breach of that good faith for Citi to force this consumer into arbitration by a bit of legal trickery.

Daniel’s problem with Citi began in 2010 and appeared to end when he won the arbitration this past August. There were just two problems: (1) Daniel was not awarded anywhere near the $100,000 he said this whole fiasco cost him, and (2) Citi is appealing.

For more details of Daniel’s misadventures in Citiland, see this CBS MoneyWatch story, and his own account.

We look forward to hearing your thoughts below.


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October 31, 2016

Citi Enlarges the Fine Print, But a Clever Ploy Lurks Within

Filed under: Finance — Edgar (aka MrConsumer) @ 6:09 am

We all periodically receive a “card agreement” from credit card issuers. It is usually a small, sixteen panel, accordion-pleated booklet full of fine print about how finance charges are calculated, how fees and payments will be applied, etc.

Citi card agreement

Citi, however, has seen the light. They just sent out a new and improved version on 8-1/2 by 11 paper, divided into numbered sections, printed using a decent size font, and written in relatively plain English.

new agreement

The new document is 15 pages long, however, which probably won’t encourage too many people to sit down and read it.

One big change in terms is Citi’s mandatory arbitration provision. They have heard regulators and advocates complain about these legal provisions that prohibit cardholders from going to court or participating in a class action lawsuit against the card issuer. Citi is giving their customers a one-time chance to opt-out of arbitration.

(Larger than usual) *MOUSE PRINT:

arbitration provision

You only have until December 22 to notify Citi that you want out of arbitration. But lest we think that Citi has completely become pro-consumer, they required you sent them a physical letter with your request to opt-out. You cannot call (we tried) and you cannot email. You have to write a real letter (remember them) and put a stamp on the envelope.

Citi has certainly taken an approach to assure that the fewest possible cardholders will take advantage of this one-time offer. At least they didn’t require the request to be notarized and sent via certified mail.


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April 25, 2016

Early Withdrawal Penalties Reach New High (or Low)

Filed under: Finance — Edgar (aka MrConsumer) @ 5:47 am

Dave S. recently wrote to Mouse Print* about an eye-opening notice he received from Wings Financial Credit Union when his certificate of deposit matured. It announced a change in their early withdrawal penalties.



Unbelievably, the credit union will now charge two-years-worth of interest on any CD over a year if you withdraw money early. In other words, if you opened one of their 26-month CDs with $25,000 paying 1.00% interest, and decide three months after opening the account that you need the money for another purpose, they will confiscate the interest you’ve already earned and put it toward a total charge of $500 in penalties! You will actually lose principal.

Mouse Print* contacted Wings Financial to question the severity of their new penalties. A customer service representative replied:

…we have had many members express the same frustration. We are awaiting Board approval to reduce the penalty…

This credit union is not alone in jacking up early withdrawal penalties. Gone are the days of the simple three months loss of interest for early withdrawals. Even MrConsumer’s own credit union is clamping down.


USAlliance terms

Here, the penalty is only a year of interest. How generous of them.

We’ve always thought of credit unions as being very member-driven, and offering better rates and terms than the big banks. That apparently is not always the case.


• • •

April 18, 2016

Citi’s New Credit Card Fine Print Improves Benefits

Filed under: Finance — Edgar (aka MrConsumer) @ 5:55 am

Citi Double Cash CardOn April 17, Citi sent out an email to holders of certain credit cards announcing “Important information about your card’s protection benefits.” Uh oh, you know what that usually means. But for once that notice from a credit card issuer announcing a change in terms had good news for cardholders, reversing an industry trend.

Buried in the linked detailed brochure are these generous improvements in benefits:


“Citi Price Rewind,” the card issuer’s name for their price guarantee (if an item is advertised for less within 60 days, you get back the difference) now will cover price differences up to $500 per item instead of just $300, and the maximum total claim you can make per year is more than doubled to $2500.


“Extended warranty” which previously doubled the manufacturer’s warranty up to an additional year, now gives you 24 months of extra protection even on manufacturer’s warranties as short as 90 days. This is a HUGE new benefit for shoppers.


“Return protection,” which provides that the credit card issuer will buy back an item you want to return if the seller will not accept it, increases from a protection period of 60 days after purchase to 90 days after.


“Trip cancellation and interruption coverage” which provides a refund of certain travel purchases if unforeseen events occur, is substantially expanded. The old policy only covered $1500 of expenses per year. The new policy covers up to $3000 per trip. The new policy also greatly expands the definition “family” to even include a family pet that may have a life-threatening illness.

There are many additional changes in contract language in the new set of benefits compared to the old.

A few words of caution: this list of benefits is not all-inclusive, and does not apply to all Citi credit cards. At a minimum, it does apply to the Citi Double Cash card. These new benefits go into effect on May 15, 2016.


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November 23, 2015

Chase Ups Credit Card Costs But Does So Transparently

Filed under: Finance — Edgar (aka MrConsumer) @ 6:31 am

How many times have you gotten a notice from your credit card issuer announcing “changes” to your credit card agreement but you can’t quite figure out exactly what they’ve done?

Most times, they simply announce that your new APR is so and so, or the fee for a late payment is $X. Without going back to your original agreement which you don’t have, you have no idea how much more you are being gouged. (We all know that rates and fees rarely go down.)

In a refreshing change, some Chase Freedom cardholders last week received a huge 10.5″ by 17.5″ notice about “important changes to your acccount terms.” Here is what made it even more remarkable.

Very large *MOUSE PRINT:

Chase terms
Click to enlarge

They actually show you, side-by-side, what the old terms were and what the new terms will be. It certainly doesn’t convey good news, with finance charges jumping over five percent, and late fees going up as well. But, at least the cardholder wasn’t left in the dark about what exactly they were doing. A big hat-tip to Chase.

On the other hand, why Chase was raising rates wasn’t quite as clear:

The changes to the Annual Percentage Rates (APRs) described below are to standardize these terms for cardmembers who have the same type of account.



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