Credit Card Marketer Uses Clever Way To Circumvent New Regs

Looks like at least one credit card marketer has cooked up a clever way around regulations that forbid unsolicited credit cards from being issued and showing up in your mailbox.

Reader Al says he got sent a replacement card for his MasterCard, even though he hadn’t asked for it and it wasn’t expired. On top of that, also included in the envelope was a new AMEX card that he had never asked for either.

“When I called to ‘activate’ my replacement card and cancel the AMEX card, the Citcard employee tried to convince me that it was not really a NEW card because AMEX charges would be routed to my existing Master Card account number,” writes Al. “The literature with the cards also included an incentive to keep the new one: a temporary extra 0.2% in the dividend check.”

All a gambit to try to get him to take the new card, even though physical cards aren’t supposed to be shipped unsolicited as marketing techniques. Sneaky, sneaky!


Edit Your Comment

  1. Cat says:

    “I’ll see your regulation, and raise you a loophole”

  2. mauispiderweb says:

    Oh Citibank, you’re right up there with BOA. Where’s the Worst Bank in America vote?

    • Cat says:

      I hope the voting starts soon, before somebody takes a dump in the gulf.

    • scoosdad says:

      I see the former Comcast Cares Frank Elias is now working for Citibank. Maybe he’ll chime in on this one.

    • jeffbone says:

      Seems to me a “Worst Bank in America” vote would almost always end in a four-way tie between JPMorgan Chase, Capital One, Citibank, and BoA…

      • ExtraCelestial says:

        Interestingly enough, they also seem to be getting closer and closer to becoming the ONLY banks in America.

  3. apupnamedshamus says:

    I don’t see how this is violating any law or regulation. This isn’t a new account, it’s one that already exists, and you have an existing relationship with the bank. My wife’s BOA Visa (which we don’t use, but it has a massively high limit and she’s had it for a decade so we keep it active) was recently upgraded to a Visa Signature card. As such, they sent us a replacement card with the new branding. While it has a new number, it’s still the same BOA credit account.

    I imagine the real (and yet untold) story here is very similar. Though I never heard of an account having both a MC and Amex card linked to it, but who knows.

    It wasn’t like they sent you cards for a new unsolicited account.

    • Cat says:

      “I was in the kitchen,
      Seamus, that’s the dog, was outside.
      Well, summer seemed so lonely,
      My old hound dog sat right down and cried.”

      Sorry. Your username made me do it.

    • K-Bo says:

      If the limit for the 2 cards combined is the same as the limit was on the first card, I agree. Otherwise, they are being sneaky.

    • AustinTXProgrammer says:

      I don’t know if you know this yet, but the signature card typically doesn’t report a limit and might undo the reason you kept that account open… Ouch.

  4. AlteredBeast (blaming the OP one article at a time.) says:

    So the card has a different card number, expiration date that doesn’t fall in line with the prior card, and different terms?

  5. PLATTWORX says:

    I would like to have Citibank confirm this story or see what is being sent out.

    MasterCard and American Express are COMPETITORS. The whole … “it was not really a NEW card because AMEX charges would be routed to my existing Master Card account number,” makes no sense.

    You do not route AMEX charges (on their network) back through the MasterCard network and apply them to a MasterCard account. AMEX, MasterCard and Visa each charge fees (to merchants) to accept their cards. When you use the AMEX card AMEX charges the merchant it’s percentage… if Citi then routes that same charge though MasterCard there would be additonal fees. MasterCard isn’t going to process those charges as a gift to AMEX or Citi.

    Heck, bank are not usually permitted to market those different brand cards together.

    The entire explanation the OP received runs counter to how credit card transaction work.

    • bite back says:

      This ‘daisy chain’ of running charges through multiple card issuers, and letting each collect their merchant charges sounds like collusion.

      Quick, somebody call the new Consumer Financial Protection Bureau, just as soon as the Republiclowns stop filibustering the agency head nominee’s confirmation.

      • PLATTWORX says:

        I understand Citi issues Amex cards. My question is both Amex and MasterCard are organizations that collects fees no matter what bank issues a card with thier brand.

        The “daisy chain” described by the OP means both Amex and MasterCard would be entitled to their fees on the same transaction. I doubt any merchant would allow MasterCard to claim fees on a charge where an Amex card was presented and they have already paid Amex their fees.

        Citi can’t be eating them (a money looser) and merchants certainly are not going to pay both brands interchange fees.

        • kella says:

          Why, why would they daisy chain the networks?

          The credit line exists at Citi, they can issue two cards (on different networks or the same) that both charge against the same credit line.

          So, for the Amex card:
          Retailer -> Amex -> Citi (account #XYZ)

          For the MC Card:

          Retailer -> MasterCard -> Citi (account #XYZ)

          No need to daisy chain. On the plus side (for Citi), if you use the Amex card they get a higher interchange fee.

          I actually wish Fidelity did this with their Amex card. It would be nice to have a Visa card that charged to the same credit line as my existing Fidelity Amex card (giving me 1.5% when I use the Visa and 2% when I use the Amex).

          • MyopicRaiderfan says:

            Exactly, this isn’t a new account or new credit limit. Checking accounts let you pay by check or debit. Either way its your choice. WIth the CIti option that I have btw I can use my Citi AMex at Costco and my Citi Mastercard at the gas station and it all ties to one account.

      • sirwired says:

        In this case, AmEx merely acts as payment processor, in the same way that Visa and MC do. The fact that AmEx also happens to issue cards themselves is irrelevant.

    • MFfan310 says:

      Not entirely true. American Express issues their own cards, but also licenses their network to Citi, BofA, and others. In fact, Citi recently switched the entire Macy’s and Bloomingdale’s co-branded card portfolios from MasterCard to AmEx.

      In this case, Citi can issue both Citi-branded MasterCard and AmEx cards to a customer. Both cards would be issued by Citi and serviced by Citi, not by American Express. Like with a Visa or MasterCard, AmEx would process the transactions on their network and place the “blue box” logo on the front of the card.

    • Fine Material says:

      I got this recently also. My solution is to put away the card and never use it.
      They have a $300 max on cash back and this would only get you there faster. Why use it?

      Hey Citibank: if you want me use my card more get rid of the $300 maximum. I use AMEX, which has no limit and only go to the MC as a backup.

  6. Blueskylaw says:

    We are not circumventing regulations, we are
    merely reacting to changing market conditions.

  7. sirwired says:

    Hmmm… I don’t see a problem with this; it’s a new way of accessing an account the OP already has open. The rules forbid opening a brand new line of credit without an application, but the OP isn’t getting any new credit.

  8. MyopicRaiderfan says:

    I got this card(s) two weeks ago. They are Citi branded master cards and amex. They tie to the same account number and credit limit. Nothing is increased and there is nothing on your credit report that shows an additional card. This is just a way to choose which type of card you want to use. FYI we get bonus points right now using the Amex.

  9. Grungo says:

    I had this exact same thing happen to me. What’s the game being played by the credit card issue here? I didn’t understand it.

    My solution was to shred the Amex card and refuse to activate it. (For starters, I already have an Amex with better terms and conditions than they one they tried to give me).

  10. oldwiz65 says:

    Typical for credit card companies. They better not pull such a stunt with me.
    How in the world can they issue you a new CC without you requesting it and signing for it? I thought that was against the rules.

    • MyopicRaiderfan says:

      Its not a “new” account. Its the equivalent if they sent you an extra mastercard. Don’t want it then shred it. The card still has to be activated. No credit limit increase or decrease. No change to your credit report because you still only have the single account. I fail to see how this is bad.

  11. kataisa says:

    Citibank sent me a new card which I thought was a replacement card but it has the same number on it. It’s a “Thank You” Citibank card and it’s expiration date is different from my other card (which hasn’t expired yet).

    I activated the card but I haven’t used it yet. I’m still confused as to why I now have two Citibank cards with the same account number but different names (“Thank You” and “Diamond Services”), and I’m wondering if I can cancel the “Thank You” card and just keep my regard Diamond Service card.


  12. MattO says:

    i got the exact same thing – our mastercard from Citi was about to expire (a mastercard world card with rewards), and we got a replacement (of both cards) along with 2 amex cards as well. havent used the citi amex because i use an amex blue cash which has unlimited cash back….but i have it in the wallet anyways.

  13. dzap says:

    So…this is starting to spread to America huh? I was travelling throughout Southeast Asia this Summer and saw ads by a local bank in Malaysia that advertised having TWO Amex and MasterCard (or VISA)..under one account. I didn’t really understand the purpose of this. I found an ad here..
    ..I think you get more benefits with using the Amex..but then why even have the VISA/MC then?

    My only guess if that Amex is trying to push into the market by getting more people on board so more will accept them, since MasterCard/VISA wholly dominate in Asia. I brought my Amex with me and I don’t think I used it once.

    • jamar0303 says:

      8.88%, huh? Beats any Credit union I’m eligible for. Wonder if Maybank will take offshore applications?

  14. TasteyCat says:

    It’s a new card, but not a new account. AMEX charges .5% or more higher than Visa and Mastercard. If you use it, more money in their pocket. If not, they didn’t lose much making the card.

  15. olderbudwizer says:

    GF was solicited by Citi (she has an existing American Airlines Citi Mastercard) for the new Citi-AMEX. She found they were consolidated accounts but they did raise her limit a fair amount. So she has 2 cards. We’re still confused by all the flurry of co-branded AMEX’s out there so recently.