Citicorp posted a $4.4 billion profit this past quarter. Pretty fantastic, right? How are they rewarding their loyal customers? By jacking their interest rates and closing their credit card accounts, of course.

Reader Matt wrote to Consumerist for help:

I’ve been a Citibank cardholder for eight years now. I got my first card, a Citi Platinum Select, my freshman year of college in spring of 2002. Subsequently, over the intervening years, I’ve received three more cards: a Dividend rewards card, a Diamond Preferred card, and a Citi Professional card. Prior to this fracas, I maintained a FICO score above 700 on all three bureaus. My one major ding, however, was the balances to limit ratio…I fell into the trap of lots of college students. Going through grad school didn’t make things any easier. But I never missed a payment, was late only once in 8 years (and that only by 1 day), and I always made more than the minimum payment.

The problems started when, in preparation for the CARD act about six months ago, Citi sent me letters regarding my Dividend Rewards and Diamond Preferred cards, casually alerting me to the fact that they were changing the terms of my card. My rates would increase from 6.99% and 9.99%, respectively, to 29.99% each. (The former rates were not promotional rates, they were the result of consistently calling in every six months and slowly whittling down the rates over time.) The only way to I could retain my old rate on these cards was to cancel them. They explained the rate increase as the result of “increased lending costs”. I didn’t buy it, and immediately canceled the cards.

Since I carried balances on both cards, it immediately hurt the already bad situation in my debt ratios on my credit score. i.e. I had X amount of debt, with a $0 limit on the closed accounts. Kind of turned me upside-down.

Today I received another letter from Citi, notifying me that, “In our normal course of business, we review the standards we use to extend credit. We recently adjusted our credit standards and your account does not meet our new standards. As a result, your account will be closed on May 13, 2010.” So there goes my Platinum Select card, my longest held, most established revolving account. The only card remaining is my Citi Professional card, and I worry it’s only a matter of time before the other shoe drops.

To sum it up, Citi arbitrarily rate-jacked two of my cards, leaving me with no recourse other than to close them. Then, on the third card, they punished me even further for the problem that they helped cause, by randomly changing the requirements (which I failed to meet) and canceling the card. Color me surprised….I thought the CARD act was supposed to stop this kind of customer abuse?

I’m writing both as a cautionary tale (cut those cards up, PAY THEM OFF!) but also to ask for advice. Did I mention I’ve been unemployed since February 2009? Through all this time, yes, the balances crept up even further in relation to their limits, but I’ve never once gone over my limit, and I’ve still managed to scrape enough together each month to pay in excess of minimum, if even only $10 or $20. I deeply worry this will cause a cascading effect, further hurting my score and creditworthiness. I’d be glad to open another card and transfer balances, but that doesn’t seem like a very realistic option right now. I’d love to get rid of Citibank completely, but I don’t have any idea how.

There’s great advice from the Consumerist hive mind in the comments to this post from a reader who lost her job while carrying credit card debt. Also, try calling the secret backdoor numbers for Citibank to plead your case and try to get them to act in a civilized way. Good luck.

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