Late credit card payments: Citigroup good, Chase bad

By | May 4, 2007

Citigroup and Chase both offered as a deal recently where we could transfer balances to our cards issued by them and get a low interest rate until the transferred balance was paid off.  Due to either sloppiness or bank error, I managed to miss a monthly payment to both cards.  How the two banks handled the missed payment is a lesson in good customer service vs. predatory lending.

(Concerning how I managed to miss the payments, GnuCash said I made them, but Citizens Bank online banking said I didn’t.  I didn’t save the confirmation number from Citizens, something which I’ve sinced started doing, so I can’t prove that Citizens lost the payments, as opposed to me forgetting to click the “Confirm payment” button or something equally silly.)

Chase didn’t notify me about the missed payment.  When I got my next statement, there was a late payment fee on it, which is reasonable, and they had jacked up my interest rate from the promotional rate to something like 25%.  I called them on the phone and explained that I thought I’d made the missed payment and didn’t know how it could have been lost.  I pointed out that I had never missed a payment before and had an excellent credit rating.  I told them I felt it was perfectly reasonable for them to charge me a late fee, but given my excellent payment record, I didn’t think it was appropriate for them to jack up my interest rate, and I asked them to put it back where it had been before.  They said no.  I explained to them that if they didn’t, I was simply going to pay off the entire outstanding balance, and then instead of making 25% or even 4.99% (the promotional rate) on my balance, they’d be making nothing.  They once again declined, and said that they could not even consider lowering the rate until I had made four consecutive months of on-time payments.  I told them there was no way I was going to pay 25% on a large transferred balance for four months.  They said there was nothing they could do.  So, as promised, I paid off the balance.

Now contrast that with Citigroup…

Four days after the due date of the payment on the Citigroup card, someone from Citigroup called me out of the blue to ask when they’d been receiving the payment.  He said that he was calling because given my excellent on-time payment record, it was surprising that I had missed a payment.  I told him that according to my records I’d already made it, but that I would double-check.  While still on the phone, I logged into Citizens Bank and confirmed that the payment wasn’t there.  I told him I didn’t know what had happened, but I was going to go ahead and immediately send a payment for the total due on my new statement (i.e., the missed month plus the current month), which he gave me over the phone.  I logged into the Citigroup site and sent the payment through there because that would take only a day, as opposed to a week for Citizens Bank.

When my statement arrived, there was a late payment fee on it, which I expected, but my interest rate remained at 1.99%, the promotional rate. Citigroup was smart enough to realize that if they were willing to give me that rate in the first place, it would be stupid for them to jack up the rate merely because I accidentally, and atypically, missed a single payment.

Which bank do you think I’m more likely to give business to in the future?

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10 thoughts on “Late credit card payments: Citigroup good, Chase bad

  1. Allan Provost

    I think that Citicards and possibly other companies delliberately “lose” millions of statements at certain times, so they can change late fees. If only half a million customers fall for this scam, and pay a $30.00 late charge, that’s 15 million dollars for their execs to share.

  2. CLR

    I have been paying all of my bills on the 15th of the month for several years now with no problem. My credit card bill is usually due on the 16th or 17th of the month depending on when the weekend lands in relation to the due date. I was surprised to catch a $39 late fee on my last Citi Credit Card statement and called to ask about it. I was immediately put in touch with what sounded like an American citizen (surprise surprise) who informed me that I had made the payment one day late. Before I could ask anything else he put me on hold and returned about 45 seconds later telling me that my late fee would be refunded and nothing else would be effected. All in all it took about three minutes from the time I dialed to the time I hund up. I am still not sure why my bill due was due on the 14th. Must have been the fact that Feb is such a short month and everything lined up perfectly weekend wise. Or maybe leap year had something to do with it. Regardless I was extremely surprised with Citibank’s prompt handling of the matter and its outcome. I got my late fee back and haven’t seen any rate hikes or anything of the sort (although I pay my balance in full every month so I don’t pay much attention to the rates). Maybe their willingness to fix the problem was because the due date was a mistake. I will probably never know. I will be paying my bills on the 10th of the month from now on to avoid any future problems, but I highly recommend Citibank’s efforts to keep me happy as a customer.

  3. Jon Siegel

    I just got off of the phone with Chase, after having exactly the same bad experience noted above – for the second time this week. After my first call I though I would try to speak to someone else in case I just had an uncooperative “Customer Service” supervisor, but all held the same line.

    I have had 3 credit cards, a mortgage and a car loan with Chase, all for many years with an excellent credit history. I was one day late on my last payment (one of the promotional rates). Next statement I got hit with 18+% interest plus late fee. I had long discussions with several different “Customer Services” supervisors, and all said that there was nothing they could do, as the interest charges were “non-waivable.” I acknowledged that the charges were legally legitimate, as they were the terms of the promotion, but requested some consideration and adjustment based upon my long clean history with them, and the number of accounts that I had with them. I asked if customer retention had any importance to them. They simply maintained their same position and said that they could cancel my account if I wished. They would not let me speak to any other next in line manager, but gave me an address to send any dispute or complaint to. I have cancelled my three credit cards. I know that other credit card companies have much more customer friendly policies, including the authority to compensate customers at least in part in such situations. Not so at Chase. They were legally correct, but that does not make them customer friendly, nor a company that I would like to do business with.

  4. Tony

    Just had the same thing happen with a Chase card that I consolidated all my balances on to at the 4.99 rate. We are in the habit of paying off debt on a weekly basis, so I calculated what the payment would be per month and started paying off before the first minimum payment was even due. Guess what? Because the “payment due date” falls around the 12th of the month, and the statements “billing cycle” goes from the 22nd of each month to the 22-23rd of the next, my first two payments (paid during the month where I had no minimum due) were applied by them to the outstanding balance, not as I had thought, to the upcoming minimum payment due!)

    Long story short, my next three weekly payments brought me up $19 short of the minimum payment due, (when I thought I would be almost $300 over it), and they cheerfully accepted(and, I found, applied them to the balance) the next two weekly payments, taking me to the end of that billing cycle duly noted on my statement. The curious thing, is that at the top of the statement where it says “Amount Past Due”, it’s zeros. Those last two payments are not going to be applied to my next monthly minimum payment due, either!

    I was immediately zinged with an 18.95% interest rate and a $39 late fee. I was on the phone with a Sr. Supervisor for about 45 minutes trying to get this worked out. She claims that she petitioned the home office on my behalf to get the 4.99 reinstated however she could only offer a “50/50” chance that it would happen. Interestingly, during our conversation she slipped and said “…..what can I offer you….” Apparently she has the power to offer a lower rate, however not the one I started with at 4.99%

    I previously had a long history with them using a similar check at a 2.99% rate paying it off the same way, but I have the feeling that they never intended to honor the 4.99 right from the start. So Caveat Emptor….if you use these promo checks and want to pay like I did, make sure your “minimum payment due date” coincides with the end of billing cycle date (after the fact I found out you can change the date through their online service.)

    All in all, I was treated like a POS by these people, verbally berated for not fulfilling my end of the bargain by making the payment on the due date. I was also actually told, that it was possible to “pay too early.” I’ll be paying them in full shortly, but think of the people that don’t have that option. Chase is making it policy to give their customers a good f@#$*&g!

  5. jik Post author

    First of all, even before I had a penny of debt to my name, I used credit cards whenever possible, because (a) they’re more convenient than cash, (b) when I pay off the full balance every month I get to use the credit card company’s money for free (and make interest on it) for several weeks, and (c) anybody with a semi-decent credit rating can get a card which pays you for using it, in cash, frequent flyer points, or some other thing of value.

    Even today, when owning a house and raising a family means that I do have some debt, I still have several credit cards whose sole purpose is to be used whenever possible and paid off in full every month, for all the reasons described above.

    If you think that credit cards are only useful to people who can’t pay off their balance every month, you’re confused.

    Second, I transferred part of my home equity line of credit balance to the Chase card when they offered me the promotional interest rate, since their rate was lower than the rate on my equity line, and when they screwed me over, I simply transferred the balance back to my home equity line by paying off the Chase balance from it.

  6. Tracy

    If you had the money to pay the balance off, why do you have a credit card?

  7. Valerie Franck

    I recently had a really bad experience with Chase. I did not choose to open an account with them, but had a credit card transferred there from FirstUSA (a merger).

    In March, I had my credit card stolen. As expected, the person who stole it immediately ran up over $1,000 in fradulent charges. I first filed a police report, and then called Chase to report the card stolen. That is when I was informed of the fradulent charges. I was told they’d be reversed, and paperwork would be sent to me confirming I’d reported a stolen card with fradulent charges. No paperwork came. The charges were not reversed.

    When my next bill came, I called to complain and was told that their fraud department is very slow, and not to worry, that the charges were marked as fradulent. The person on the phone even read them back to me. I was told to pay off the balance except for the fradulent charges. The charges were not reversed, and instead I was charged a finance charge (on the entire balance, of course). I reported the card stolen on March 4. It is now May 15 and the charges are still on my card, and I have been charged three finance charges (over $150), since I have not paid my balance in full since this happened.

    After receiving my third bill with the disputed charges, I called to complain again. The first person I spoke to said they had received notice that the card was stolen but the security department decided to re-post the disputed charges, despite the fact that I was never notified of this decision. He then transferred me to a second person, who said they had no record of the fact that my card was stolen, only that it was cancelled, and asked which charges I was disputing. I was told I would receive paperwork in the mail about the disputed charges. (Sound familiar?) Of the over $150 in finance charges, only about $50 would be refunded if Chase decides the charges are fradulent.

    Guys, I have a police report saying I was in a different town at the time the charges were made. No one has asked me for this police report, nor have they allowed me to submit it as “evidence” in my claim.

    This sounds like a scam.

  8. jik Post author

    There are plenty of ways for credit card companies to make money without charging usurious interest rates.

    Independent of that, what Chase did was simply stupid — By jacking up the rate and forcing me to pay off the balance, the didn’t make any money off of me, rather than leaving me at the promotional rate and continuing to make interest for a long time. They failed to understand the simple fact (which they should have known from my credit report) that as a consumer with a good income, a good credit rating and other available credit, there was no way I was going to let them charge me a ridiculous interest rate on that money.

  9. credit card analyzer

    Well, predatory lending is not new among credit card companies, how else can the lenders make their earning? You say Citigroup didn’t raise the rate, they simply know that they’ll get more from you in the long run. They do make their earnings but in a wiser way.


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