This Citibank Balance Transfer Offer Sure Sounds Dangerous

RP was just offered a transfer on his Citi card by a Citibank CSR, but the CSR was kind of vague on the details of the offer and could only repeat the benefits. RP looked online while the CSR pitched the offer, and found that there’s quite a big catch in the fine print–after six months, the interest rate jumps from 3.99% to 29.99%.

Just called to activate a replacement card and I was offered an “interesting” deal. They were (intentionally?) sketchy on the details, for a reason that is laughably obvious upon further examination, and while on the phone kept asking if I wanted to proceed with this balance transfer.

The pitch went something like this (truncated for sanity):

There is an offer on your account, a balance transfer for 3.99%
-From other accounts?
No, this one works with your Citi account.
-What’s the catch?
No catch, 3.99% for six months, no fee to take advantage of this (usual spiel)
-What happens after six months?
It’s 3.99% for six months.
-Okay, it’s 3.99% for six months, but what if you don’t have it paid off at the end of six months?
Can I put you on hold?

At that point, I found it online* and hung up.

Here’s the catch. You take out a loan on your Credit card debt at X% interest… and it comes due within six months. So if you don’t have the financial flexibility to pay off your card in “six easy payments”, then you’ll default and get jumped to the 29.99% rate, and likely sent to collections as well. Because it’s a LOAN, you won’t be able to transfer it to another creidt card either.

Pretty much a guaranteed Catch-22 if you’re not aware and get wooed by the offered interest rate.

Are they trying to default people now?

*If you have a Citi account, login, and under Tools & Services I have a “Request a Loan on your card” option with the details.

We don’t have the details of the offer to verify what RP says about the fine print, but it’s a good example of why you should never agree to any sort of upsell from a credit card CSR over the phone. As long as financial companies bury crucial details in fine print and legalese, doing new business with them via telephone is just asking for trouble.


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  1. lvlass says:

    I used to work for Citi. Their marketing department is constantly coming up with gems like this. My favorite one was an offer to cardholders to use the “handy enclosed checks” to pay for christmas purchases in lieu of their card.

    In the fine print, they revealed that using the checks actually constituted a cash advance and would incur the cash advance fee and daily compounded interest.

    Stay classy, Citi!

    • sleze69 says:

      Meh. I used the credit card offers like this to pay off an old loan. Throughout it all, I kept a “regular” credit line that had a 10% interest rate to use if I couldn’t find another good intro rate. If I recall, it went 2.9%, 3.9%, 10%, 6% paid off in about a year and a half.

      This is a case of a bad salesman and caveat emptur.

    • H3ion says:

      I also receive those wonderful checks. The surprise is that I receive them from Capital One and I haven’t had an account with them for over three years. Shredder food.

      • ahleeeshah says:

        You might want to call Capitol One and tell them to block your address from receiving anything. I got a privacy notice in the mail from them (Haven’t had any account with them for at least a year), and when I called to figure out why, they said that even though I’m not with them anymore, my address is on file and they can still give it out to other companies unless I opt out.

        It was actually rather amazing as I had moved a few months before and had never notified them of the change.

      • zegron says:

        We burn those in the sink, they make a pretty green flame. :-)

    • t325 says:

      I got some checks the other day from Chase, I finally got sick of them and called and asked them to never mail me to them again. The guy on the other end of the line (and other side of the world) said I wouldn’t receive them anymore. We’ll see about that.

    • Telekinesis123 says:

      Yes they send me those checks constantly as well, probably because they haven’t made a cent off me in interest since I’ve had a card with them (CapitalOne)

    • Orv says:

      I hate those checks. I wish they’d stop sending them. I’m always worried they’ll be stolen out of the mail…although I guess if they were, that’d be Citi’s problem, not mine.

  2. SecretAgentWoman says:

    I have no credit cards. I’ve been thinking I should get one or two, because they say it’s a good thing. But I keep reading stories like this…

    • ColoradoShark says:

      I would still recommend you get one and assume they are going to screw you over.

      It is is handy when buying stuff as we’ve been able to use the extended warranty several times. The most surreal one was when a little microwave went bad. It was under $100 so the proof required was minimal and no attempt to repair it was required.. We bought another one, sent them the receipt and they sent us a check for what we pad for the new one.

      • AK47 - Now with longer screen name! says:

        “. . . and assume they are going to screw you over”

        It makes me so sad that this is where we are now, with so many companies.

        • Orv says:

          It’s how capitalism works. One side is always trying to take advantage over the other to increase their profits.

    • H3ion says:

      They can only screw you over if you let them. As long as you pay in full each month, your interest rate is 0%. It’s almost essential for hotel and car reservations and it’s nice to have in an emergency, even if you never need it.

    • marsneedsrabbits says:

      If you decide to get one, go to the local credit union or bank where you have your other accounts and get it through them.

      We have ours through our credit union, and we have always had a very low, consistent rate. They don’t mess with the terms, they don’t send a lot of extraneous stuff, and they don’t play games.

      At our particular credit union, simply having a credit card through them (even without a balance) entitles us to a safe deposit box, notary services, etc. I think we’d qualify for those things anyway, due to our other accounts, but if you don’t have those other things, its a nice bonus.

  3. daddy_froglegs says:

    This isn’t limited to Citi, they are pretty much all this evil. You have to get it specifically in writing that any transfer at a low rate like 3.9% is for the LIFE of the transfer. Unless of course you actually can pay it down in the time slot they’re offering.

    Personally, I say to hell with the CC companies. They do not get my business any more. 2 years CC free and loving it.

    • Bohemian says:

      They are all a complicated deal with the devil. The time you would have to waste researching the terms and making sure you jump through all the hoops to not run fowl of their complicated little game is just not worth the possible benefit.

      I hear all these stories how people can’t pay their payments early and the companies do everything possible to delay posting their payment. No thanks. I have better things to do with my time.

    • Zclyh3 says:

      Yup. That’s the only way it will work. Gotta get it in writing. Never do business over the phone.

    • Jevia says:

      Have to agree. I just tossed some “convenience” checks from another credit card that was offering a “low rate” of 3.9% for six months, but was going to charge a 5% balance transfer fee, plus raise the rate to 19.99% after six months. Why would I fall for that crap?

  4. wcnghj says:

    “Because it’s a LOAN, you won’t be able to transfer it to another creidt card either.”

    This is incorrect. Just call the CCC you want to balance transfer and give them the account number, creditor, amount and address. It doesn’t have to be transferred FROM a credit card per say.

  5. stinerman says:

    I got one from them for 0% for 6 months and after that it returns to the regular purchase rate. The only catch was a 3% balance transfer fee up front.

    It was still a good deal in the long view.

  6. diasdiem says:

    That’s why they try to hook you over the phone in not in person. The cloven hooves and the smell of sulfur and brimstone are a big giveaway.

  7. Telekinesis123 says:

    Obligatory: It’s a trap!

  8. ScottCh says:

    Unless you have a poor credit rating already, you can still get a credit card with decent terms. You just have to shop for one carefully. If you have access to a credit union, look at the terms they offer. Some credit unions have a very low bar for access. I qualified for a local one just by signing up for their “Travel Club” – for a one time fee of ten dollars. If you have a relative in the service, I recommend USAA. Their credit card terms are about as fair as you’ll find.

  9. SG-Cleve says:

    This should be fraud. Not for the jump to 29% interest rate, but because they advertise it as 3.99%, but after you factor in the 3% “transaction fee” the six month special rate is actually closer to 10%.

  10. jayphat says:

    That percentage is illegal in Ohio. Ours is a max of 24.99. Still, that kind of jump is CRAZY!

  11. Chargeback says:

    Citi will die in the next few years, just look what happened to their stock price today.

  12. spamtasticus says:

    I once gamed one of these deceptive deals from Chase. They sent my wife 2 checks because she had a Chase card. One was for 0.99% for one year and then it would jump to 29%. The other was for 2.99% for the life of the loan. I could use them for anything. There where “transfer fees” but I used them to pay off the remaining balance on a car I had of about 8k and in one fell swoop lowered my interest on the 8k from 9% to 2.99%. The catch, of course was that if you sent a payment it went to pay down the lowest interest “account”. So if I used the credit card and sent monthly payments it would pay down the low interest 8k slooooowly. Therefore the rest of the debt put on the card would be rolling and rolling at 29%. I simply killed the card and never once put a dime on it besides the 8k. It was a great deal! They did not even make enough on the deal over 2 years to cover inflation.

    • Rachacha says:

      Doing this with my Mortgage on 0% cards with 3% balance transfer fees capped at $75. Take a $20K balance transfer from my mortgage dump it on the CC for 1 year (or the length of the 0% offer) and pay it off at the end of the term. I paid down a 15yr mortgage in 7 years doing this, and took my 4% mortgage to an effective interest rate of around 1%.

    • Jevia says:

      I’ve done that with a few of my cards. My only “problem” was a Chase card where I have a regular balance as well as the “special” balance, so while the “special balance” keeps getting paid down, the regular balance is only reduced a couple of dollars every month. The interest on the regular account is only 15%, so at least not too bad. Come February, though, Chase will have to pro rate the payments.

  13. Jesse says:

    Sounds like something Citibank would do. It took “weeks” to update their e-mail database so I would stop getting e-mail SPAM from them. Even then if you just opt to receive e-mail pertaining to account information, you still get to receive balance transfer offers from them.

  14. twophrasebark says:

    They should just allow everyone to transfer balances from card to card forever without any limit. That way no one will ever default and everyone will be rich. The banks can use some fancy accounting to show that they are getting lots of fees and sell derivatives back to the customers who can buy them with their credit cards. Then the banks can list that as profits.

    You see, the problem with the current system is that they actually expect customers to pay eventually. If you take out that part, then the banks can lend money to everyone, the economy will be very strong with everyone’s tremendous buying power and unemployment will drop to almost zero.


  15. MissCellania says:

    This is not just for loans. I got a notice a few weeks ago that my Citicard interest rate is going to 29.99% and my only option is to cancel my account. So I got a different credit card with a better rate. Bye bye Citibank!

  16. citibunk says:

    Anecdote: I have had a Citibank Mastercard since 1990. For the math challenged, that is 19 years! I missed ONE PAYMENT about five months ago because I was traveling outside the USA. Two days late. As a result, my rate jumped from 12.99 to 29.99 “per their policy”. Tried calling, CSR would not budge. I quit using the card except for emergencies.

    • Jevia says:

      I believe under the new credit card laws going into effect in February, after six months, Citi will have to return to your prior interest rate.

  17. olegonzo says:

    I have two credit cards: Chase and Citi. I usually pay off the balances. It’s been that way for over a year. Chase has rewarded me by lowering my APR to 6.99%. In that time Citi RAISED my rate to 19.99% and it has been that way for a year even though my credit score is pretty good and I don’t have any debt and haven’t had any debt for over two years.

    What’s really annoying is the fundamental problem with the system. Once you’ve had cards long enough, they have you by the balls because if you switch cards your credit score is it TWICE: Once for cancelling a card and lowering the ttoal amount you can borrow and again for canceling a card you’ve had for a while and replacing it with a new card.

    In a free market a consumer should have the freedom to change products without facing punitive measures.

    And because the CC companies now they have you by the balls, they also expect you to carry over a balance from time to time. I HAVE to do this every once in a while, otherwise the company will cancel my card, hitting my credit score.

    I’m really sick of this. This isn’t the free market , or capitalism. Consumers should not have their FICO score affected in any way should they decide: a.) never to carry a balance (as it is if you don’t, eventually the company will cancel your card) or b.) be penalized for canceling a card (by lowering your FICO score).

    I get really sick of the American system sometimes. I wish more Americans felt the same way instead of all this throne sniffing I see everywhere from liberals and conservatives alike.

    • cbelson says:

      I’ve had credit cards for over 10 years now, and I’ve never carried a balance.


      And the cards that have been canceled? Because I called the company to cancel them. Except for one, but that was a different circumstance (which you also commented on, so I’ll respond to it there.)

      They’re not going to out-and-out cancel you for not carrying a balance. Will they make it uncomfortable for you to have the card (higher interest rate or something)? Maybe. But they’re not going to cancel you for not carrying a balance.

    • Orv says:

      Once you’ve had cards long enough, they have you by the balls because if you switch cards your credit score is it TWICE.

      This is essentially the only reason I still have my Citi card. That said, unless it really jacks up your utilization rate this isn’t likely to ding your credit score for long, so if it really bugs you, just cancel the card. Unless you’re shopping for a mortgage or something small variations in your credit score aren’t going to affect your life. It’s not worth stressing about.

  18. olegonzo says:

    You should in order to manage and build a decent credit score. But only if you have self control.

    Also, pick carefully. Once you have the card for a few years, the company will hold your FICO score hostage, even expecting you to carry a balance from time to time, otherwise they’ll decide they’re not making money on you and cancel your card, thus adversely affecting your credit score.

    They way I do it:

    1.) I make all online and most travel purchases on credit cards, but 95% of the time I pay them off before I get charged for it. There are very few other things I used my cards for. I never, ever buy groceries with cards, because that makes me feel like a loser.

    2.) When I travel abroad, I use the cards knowing I’ll be hit with international charge fees, but I do it anyway because the fees are nominal and “throws a bone” to the evil cred card company so they don’t decide in 12 months to cancel my card because they’re not making money on me.

    3.) Every six to nine months I make sure to carry a balance, a small balance, and get hit with $5-$10 carryover fee. That way I think no “red flags” pop up on “inactivity.” Remember: to them “inactivity” means: “hey, We’re not making any more with this guy, because he keeps paying off his balance; let’s screw with his FICO score by canceling the card. That’ll teach him to avoid being in debt to us, HAHAHA!”

    That’s about it. I consider owning credit cards an expense. In the past year I’ve probably paid on both cards a total of about $20 in international charge fees and another $20 in planned carryover fees to keep my card, in the eyes of these assholes: “active.”

    For that fee my FICO score can be built in case I want to someday finance a car and later get a mortgage.

    Credit cards are completely evil, except for two things:

    #1.) As a tool for building a good credit score; and
    #2.) Making it more convenient to make online purchases, car reservations, plane tickets, hotel and some vacation/holiday shopping.

    If you are willing to abide to this, get a credit card — pledging never to pay more than $20-$40 a year to the CC company. If you can’t do this, don’t.

    PS: If everyone did this, if everyone paid less than $40 in fees and interesting per annum, the CC companies couldn’t exist without charging for this product of convenience. So I’d like to thank all of you people paying hundreds of dollars a year in fees. Without you, we’d actually have to pay an annual fee to own any credit cards. Thank you, poor people, for subsidizing my middle class cost of living!

    • cbelson says:

      3.) Every six to nine months I make sure to carry a balance, a small balance, and get hit with $5-$10 carryover fee. That way I think no “red flags” pop up on “inactivity.” Remember: to them “inactivity” means: “hey, We’re not making any more with this guy, because he keeps paying off his balance; let’s screw with his FICO score by canceling the card. That’ll teach him to avoid being in debt to us, HAHAHA!”

      Um, no.

      I had my credit card canceled for inactivity once.

      I think the fact I hadn’t used it for 2-3 years prior might’ve had something to do with it.

      Inactivity means inactivity. It doesn’t mean they’re not making money on you. It means inactivity. Just because you think something is true, that doesn’t necessarily mean it is.

      • taradiddle says:

        Canceled for inactivity? I wish. I have a Discover card acquired in college. I’ve never charged a thing on it; in fact I never activated the card. So now the account is 6 years old and my parents address (the address on the account) just got notice that they were raising my interest rate. Discover should really take a hint!

    • Syrenia says:

      “Every six to nine months I make sure to carry a balance, a small balance, and get hit with $5-$10 carryover fee.”

      Carrying a balance might make some issuers less likely to drop you, but that probably varies by issuer. I have cards issued by three different banks, and I pretty much haven’t carried a balance since 2001. (One large 2.9% cash advance when I’d been laid off a few years back, and an accidental underpayment last year. And both of those were the same bank, so I haven’t carried balances with the others at all.)

      • olegonzo says:

        They are increasingly booting people who don’t incur fees. I don’t like this. I used to have four CCs and now I have two because two dropped me for “inactivity”, which they defined as “me not incurring fees” because I did use those cards from time to time. I’m happy to go form four cards to two, but if either of these cards drops me because I don’t incur fees my credit score will take a while to fix from their unilateral decision that has NOTHING to do with me being a credit risk.

        That’s my main complaint. CC companies should have no unilateral control over adversely affecting your credit score. Essentially they have the power to hold our scores hostage to whatever rules they impose.

  19. headhot says:

    29.9%? your better off with the mob.

  20. infamousjre says:

    I called Citi yesterday and got the same pitch, but the guy said 0%. I think he just screwed up, but I should’ve tried to take advantage of him.

  21. Snarkysnake says:

    I guess that I am wondering when people in general (NOT readers of this site) will wise up and stop falling for these deceptive , wildly unfavorable offers from these mega banks that are designed to make you a slave to them for your entire working life. We look down our noses at the suckers in the three card monte games on the street but many millions have been sucked in to their financial equivalent for years. Because the company buys slick ads and has a cutesy logo or flatters our vanity , we seem to lose all sense of what’s in our best interest.

    Everybody that has measurable brain wave activity knows that Citi has been among the worst ,most abusive card issuers in the country for years. It no big secret. But still, I am confident that lots of people will gobble up this crappy offer like its free candy at halloween.

    Again, readers here are at least smart enogh to read the horror stories and go in with their eyes open,but I worry about the folks that don’t know how toxic this kind of deal really is…

    • Orv says:

      I think the problem is marketing these deals is cheap, so they don’t have to find many suckers to make them pay off.

  22. Bagumpity says:

    The OP stopped talking with them too soon. He should have kept them talking for at least five minutes, during which time they couldn’t be screwing someone else over. Smart people owe it to the society as a public service for the easily scammed.