Monday, June 25, 2012 - 3:14 PM
Turns out CitiBank started a policy a little while back to convert any CHARGE put through by any financial institution into a cash advance instead, charging the cardholder substantial fees and interest. Mind you, this is even if the bank you charged with put the transaction through as a charge, not as a cash advance, and intended it NOT to be a cash advance.
Over the past several years, I have opened various bank (or credit union) accounts, and have had the option to do the initial funding with a credit card, as a charge, not as a cash advance. I have done so a couple-few times, and they always came through as a charge, not costing me any fees and interest payments.
I just tried that with a new account. But now when I got my credit card statement, it is marked up as a cash advance instead, with fees and interest being charged.
To cut to the quick, I contacted Citibank about it. In the end, they tell me they changed their policy a while back, maybe a year or two, and now ANYTHING coming in from any financial institution is marked up as a cash advance, even if that institution sent it through as, and intended it to be a charge. So, even though I did not make a cash advance, and the credit union I CHARGED it with did not put it through as a cash advance, CitiBank is charging me for a cash advance.
In fact, it was two CHARGES totaling $15. One charge was $10 for the PURCHASE of a membership in a third party organization to qualify me for membership in the credit union. That unquestionably was not a cash advance, was a purchase -- and I don't see how Citibank has any right to call it a cash advance when it was not! The other was a $5 deposit to qualify and open the membership -- while that is a deposit, the credit union chooses to make it a charge (and so pay fees for a charge itself), and I don't see why Citibank should override and make it a cash advance instead.
Mind you, with Citbank, once there is a cash advance on your statement, they charge you interest on the ENTIRE statement balance, not just the cash advance portion, even if you pay your statement in full. So, even though I always pay my bill in full each month, this stupid cash advance is causing interest to accrue on the entire balance. Of course, my statement closes on the 13th of the month. I have it set to automatically take the full amount out when due, and that is around the 7th of the following month. Normally, that would clear the account, no interest to apply. But not now.
With this cash advance, paying the statement in full does not stop interest from accruing, and on all outstanding balance. Interest continues to accrue regardless, and on all balance, not just the measly $15 advance.
And they make it nearly impossible to stop that -- you can't even pay all due and accumulated through today and stop that, because they don't make the interest calculation until the statement closes, so you can't even know how much interest has accrued and how much to pay! As long as any interest is due, interest will continue to accrue -- and you can never find out how much interest has accrued so that you can pay it all off.
Further, even if you managed to do that, they will still take out the full amount on the statement when your automatic payment date arrives -- even though you already paid it as well as all else accumulated since the statement date! (Coincidentally, they are changing that policy on July 22, will stop taking the automatic payment for amounts already paid.)
I went up the ranks of course. They insisted it would take several months of paying everything due before all interest accumulating would finally get paid off and I could get back to the situation of paying the balance in full each month and thus avoiding any interest charges. And I think that is only if I made no further charges for several months, as those would only increase the amount of interest due.
So mind you, this is not just one month of interest and I will pay it off; no, it will continue for several months -- and they will not allow me any way to pay it off and stop it! And again, the interest is on the entire balance, not just the $15! The interest they are charging is 25.24% -- this even as the Fed rate is at zero! (I have never cared what rate they charge on my card -- because I never pay it since I always pay my bill in full each month.)
I will end saying that after a lot of upset on the phone with the higher ups, and using all my experience over the years in dealing with banking crap and policies and hard-nosed jerks, I think they finally got exasperated with me. They agreed to let me pay all accumulated through today (even though I otherwise would not have paid a large chunk of it charged after my last statement until August), waive their normal $14.95 fee for a telephone payment, and agree that after the next statement is issued, they will go into my account immediately and reverse any further fees or interest on it, leaving me with no more interest accruing once they do that. But mind you, this took a lot of fighting. And I will have to stay on top of it to make sure they actually do that when my next statement comes out -- how irritating. And I feel sorry for all the other people caught up in such as this, and who can't manage to get it nipped in the bud.