Banking News: Citibank (NYSE: C) Cancels Exxon-Mobil (NYSE: XOM), Shell, and Conoco-Philips (NYSE: COP) Co-Branded Credit Cards without Warning
Citibank (NYSE: C) recently cancelled hundreds of co-branded MasterCard accounts, primarily cards associated with gas-stations, without notifying their customers.
The Associated Press recently highlighted the story of Shannon Burdette, a Shell Mastercard User that found her credit card was rejected when she tried to refuel her vehicle. After calling the customer service number on the card, she was informed that her account had been closed because of a negative item on her credit report. In the AP’s interview with Burdette, she said “the only negative thing she saw was “closed at credit grantor’s request” on her Shell MasterCard account.
Burdette isn’t the only customer that’s been affected by Citibank’s unannounced account closures. Consumers across the country have reported similar experience and made postings on various consumer websites.
Citibank has confirmed some of the essentials of the story. The bank’s statement said that they had “decided to close a limited number of oil partner co-branded MasterCard accounts.” The statement said that these account closings include credit cards affiliated with Shell, Citgo, ExxonMobil (NYSE: XOM) and Phillips 66-Conoco (NYSE: COP).
These accounts were closed on Wednesday, October 14th, but according to Citibank’s own spokesman, the notices were not sent out until just two days before the accounts were closed. Citibank also declined to state how many credit cards were shut-down and how much credit those cards represented.
Citibank also recently moved to shut down its Home Depot credit cards. Citibank still plans on issuing gas-affiliated credit cards and still is accepting applications for new cardholders, promising rewards such as 1 percent cash back on spending and 3 percent cash back on gas purchases.
Under current regulations, it is perfectly legal for banks to shut-down credit card accounts without notice. Even the Credit CARD Act which is now coming into effect does not address the issue. Typically, credit card companies will maintain the right to shut-down credit lines immediately in the fine print of their agreements.
Citibank did not state why the cards were cancelled, but only issued a statement that the bank “continuously evaluates its products.”
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Great post but complicated to understand since I am from Faroe islands ;-) 
What would be your top three tips for anyone new to this topic?
Last night, when I went to fill my tank, I was surprised that my Citi Shell card was declined at the pump. I showed the card to the attendant, who submitted it again, and again it was declined. I used another (Citi) card to pay for the gas.
I was surprised because I have always paid the balance in full, on time. Because of the Shell card rebate program, I have bought Shell gas 90%+ of the time for several years. Furthermore, because I use this card exclusively for Shell gasoline, the balances are not large – rarely over $200. I thought it was an administrative mistake.
When I went to the Citi web site, I could not log in. Finally, I called Customer Service.
The CSR informed me that, “My card no longer met their credit quality standards,” and that they had closed the account. This, despite the fact that I have always paid Citi in full, and on time.
Citi apparently has received information from Equifax, and I don't know what it could be. (I do have an out-of-state speeding ticket that I have yet to settle, but all my financial relationships are in good shape.)
So I'm out. A perfect (if small) customer – at least on this account.
I am a small businessman. I use credit cards for cash management and operating cash flow. I am very concerned about the impact of Citi's action on the rest of my credit history, and how it can hurt my business.
I have large corporate clients, and I would not be shocked if they “pulled bureaus” as part of their procurement process. (Insurance companies do it when they review policies.)
Moreover, this action lessens my overall credit availability, and therefore lowers my FICO score. With the same dollar amount of credit usage, I now have a higher “balance to credit limit ratio”, an important FICO driver. So my credit score will go down.
I do all my business with Citibank, including other accounts with much larger balances. In the past 5 years, I have paid Citi $271,000. I am very concerned that I will wake up one morning, and Citi will have closed my other accounts.
What do I learn?
Do not do all your business with just one bank. With one bank, you are completely at their mercy. And you cannot trust them. They can make decisions that can cripple your business without even telling you.
Ironically, the loyalty incentives banks give you make you more vulnerable to their policy changes. It costs more and it's more hassles to diversify, but you have to protect yourself.
Being a perfect customer is not enough. So tomorrow, I'll go shopping for other sources of credit. Going forward, no bank will get more than 40% of my business.
Jimc52, I'm the person quoted in this article. I'm fairly certain that Citi is lying to you about your credit worthiness. That is the blanket statement they're giving everyone who has been cancelled. I'm quite anxious to receive the “letter” they allegedly sent, which explains why they closed the accounts. Then, I'll have their lies in writing.
If you look at your credit report, you'll likely see that Citi has already reported the card as “closed at credit grantor's request.” This is not a favorable thing to have on a credit report, and, as you mentioned, it lowers your available credit, which lowers your FICO score.
Very sneaky stuff on Citi's part. If I were you, I'd get rid of all Citi accounts ASAP. That's my plan because they're obviously in serious trouble. I'm so glad we gave them billions of taxpayer dollars in the bailout.
I think that's good advice for customers of Citi. If you're sick of their business “practices”, quit doing business with them!
I think everyone should pull out and cause a run on Shitty.
I'd love to see Pandit eating from a dumpster.
This is insane! Thats the problem of having an “free market only” economy… You are free, yes.. to the ridiculous behavior of these institutions and you have very litle to defend against.. Crazy fact is you americans gave this bank sooo much money and the payback? more fees and situations like these. Like MathewDP says… Quit doing business with them!
Alternatives? goverment intervention… cause the regulations only regulate the big guys interests
I too had my card cancelled without any notification; I used Shell and went out of my way to find a shell station due to the 5% rebate. I spend around $600 a month on gas with 3 cars. Never late, paid off in full every month; my credit scores are from 705-742. I called customer service and they said that the other person said. That's bullshit. They cancelled me due to me getting 5% and paying it off every month. On my statement I have been rebated back $1055 since 11/06. Sorry to my local Shell dealer, you just lost a customer.
These is how get treated as long time dedicated users; no warning; they only want the customer who can't pay their balance off every month and don't have to give back 5%
I called up customer service and the manager on duty after my shell cards transactions were declined.. He informed that that because of economy conditions they were revisting credit practices.
it is ridiculous. I don't have any negative information in my credit history. These companys get bail out , but they just close our accounts with no notiification and reason
Its part of being a responsible credit card user… before using a damn credit card you should CHECK YOUR ACCOUNTS. And credit card companies don't just go thru and be like oh we dont like you and you and you… close close close… They set up set stipulations, and then go through accounts…. if your credit falls into these situations you closed. I do believe it is wrong to close w/o prior notice, but if the bank advises your account is closed then you have the chance to run up the bill and stick them with it because you're pissed… grow up and realize its a business decision, not a personal “i don't like you so you're getting canceled issue…
Seems to me they're going to make some money off those cancelled cards. Before this past month (when we spent slightly over $300 … most on gas) we had over $5.00 in rebates available. We had not filled at a Shell in a while so that rebate and whatever we had coming from this month will show as a rebate, but … we can't use the card at a Shell station because we didn't have ANY notice before it was cancelled. Multiply my $5-$10 rebate by however many customers they've cancelled. A real bad move on Citibank's part and should impact Shell as well for allowing it to happen.
Another person here who got the cancellation at the pump. I've been with them since '04, pay off my balance every month and they told me that a negative credit reporting came in from Equifax. That I would receive a letter in the mail. Over a week later and nothing. Checked my credit report with Equifax and Experian and my report is spotless! It doesn't even mention that the account was closed.
I do have two other Citi cards and there's no problem with them. I will not close them since I've been with them since '92 and never had a problem before.
Shell is my favorite gasoline but I will now use the next best, Chevron, because the station is closer to my house than the Shell station.
I just got their letter informing me that my account has been closed due to “Level of Delinquency of accounts”. Thing is, I don't have delinquent accounts. If Citibank wanted to get out of the accounts, fine. I just wish they had been honest instead of lying and creating panic in their cardholders.
smartconsumer09 is full of B/S. They pick out the accounts that pay on time and get the discounts to cancel. They love the ones that carry the large balances @ 22+% interest because they are greedy! I have been a customer of City Shell for 2 years, and always paid in time to get the 5% diccount. I filled my car on Oct 16, tried to use my card and was declined in front of several people that I knew. It was so embarassing. I called cust. service and was given the same song and dance. Six days later, I got a sheet of checks from another city card offering $23700.00 available to me. I checked my credit score at Equifax, and it was 775!
Type your comment here.
I have called customer service twice now. I travel out of state every other weekend to see my husband who works out of town. On my way back my card was declined. I went into the service station because I thought it was just a problem with thier pump. To my surprise and dismay it was declined inside also. I went back out and called customer service to hear exactly what you all also described…. My account was closed due to information found on my Equifax credit report during a routine credit review. I pay for a 24 hour credit monitoring service so I assurred the CSR on the other end of the phone line that there was nothing on there that would cause them to close my account. I would have already been notified if there was a problem. After talking to them serveral minutes and all but screaming at the person on the other end out of total frustration I realized that I wasn't the only one this had happened too and they really didn't know what or why my account had been closed. All they had been told was the line we all got and were trying to do the best with the situation they could. I have (had) two account with them that I pay off in full every month. One I purchased about 1000.00-1300.00 a month on and the other anywhere from 3000.00 to 6000.00 a month which were always paid on time and always paid in full. I then tried to explain to them that I have been a customer since 03 and I didn't understand after being a good customer how they could leave me stranded like they have. There is a level of customer service missing in our businesses these days. Lets just assume that they made this decision because they were losing money on people like us (those that earned their discount and paid thier account in full every month). They still were very unprofessional and unfair in the way they have treated thier loyal, responsible customers. They could have at least sent a notice in a statement giving thier customers notice of their business decision and then announced the cancellation date in the statement so that people had time to plan. I did recieve my letter finally yesterday 10/22/09 and it stated that they cancelled my credit card because I had too many inquires in the last 12 months. Which was nowhere near what they told me on my inital call. Not to mention are you kidding me? Too many inquires? I then called back today because it just angered me again to think about how they treated us. I called demanding that they fix the statement that would go on my credit report and that they also owed me for the rebate I would have recieved on my statement next month for my purchases this month. They told me that they were told they would not change how it was reported on my credit never mind my excellent history with them, but they would credit my rebate amount. I told them that this would not be the last phone call I made and if they thought that thier poor, unprofessional business decision would just go away they were wrong. I was unfair and unjust. I also asked to speak to someone in thier company that could fix the way it would be reported and they told me there was no one to talk to. So I asked that my account me noted with the fact that I would continue to persue this issue until it was corrected. I don't know maybe some sort of class action law suit would get thier attention. I was thinking about the impact one bad business decision can make. Not only have they hurt thier good and outstanding customers they have also hurt other business owners. Think about how Shell station owners will be effected also. We work hard to have good credit and it is not acceptable to be treated this way!
we just recieved a cancellation notice from citi cards as well. good customers for severl years and was notified by letter cancelled due to “information from equifax about a serious deliquency”.!! our credit scores are rated high. these credit card compinies are liars and cheats. what can be done?
Obviously you know nothing about this situation. I do check my accounts regularly. In fact, according to the Shell MC website, my account is currently active with lots of available credit. I haven't received a letter from Citi, so how would I know that it was cancelled? Other than using the “damn credit card,” I would have no way of knowing it was cancelled.
Since my credit situation has improved since opening this account, I don't really see how I could have fallen into one of those “situations” you describe. Our credit score is excellent.
Moreover, I don't think the majority of cardholders would have deliberately run up a credit card because it's being closed. We're not children. All Home Depot Rewards customers (also Citi) were notified that their accounts would be closed on 10/31/09. Why notify one group of cardholders and not another? Perhaps it's because they (Citi) wanted to keep it quiet.
The bottom line is that Citi closed thousands of accounts because they had dismal 3rd quarter earnings and felt they needed to do something drastic to appease shareholders. I couldn't care less if Citi doesn't like me. In fact, at this point, I'm pretty sure they hate me, and I'm thrilled about it.
Myself, my brother, and my father all got our Shell Card accounts canceled. It sounds like we all got a similar letter about how an item on our Equifax reports was negative and therefore they were closing our accounts. I've not looked at my reports of late and given my current situation I can imagine they are not looking the best (however, *_ALL_* of our accounts are current) but it is ridiculous to believe my Father's reports are anything but prime. He still gets offers of 0% trial rates (well maybe no one is getting those anymore but when they were going out he was getting tons of them).
As far as having the government put a stop to this business good luck — remember the government currently holds at least a 1/3 stake in Citibank — this may in fact be a move forced on them by some Czar or mid-level treasury bureaucrat. Search out “Mish Citibank” where Michael Shedlock does some dot connecting and concludes Citibank is in very very deep trouble.
Interesting move. Obviously closing the accounts and jacking up the rates is a play to regain principal and is going to hurt them in the future (no income streams) — if they have a future.
I feel your pain, my situation is similar…no advance notice from CITI or SHELL or MASTERCARD at all, just an unpleasant decline when both my wife and I went to buy gas 2 weeks ago.
I'll never do business with Citi or Shell again…..that is a guarantee.
I even went to the trouble to investigate my credit score when CITI said our score had recently declined.
My Experian credit score is 751 as of the date they cancelled my card…..surely this was a mistake I told CITI's customer service…..of course they said “we can't discuss individual credit decisions”
The score by the way is considered VERY GOOD just short of the highest tier of 760 and above that Citi indicates was the reason for the closure.
Apparantly, if you refinance your house from 15 years to 10, pay 1500 extra a month on your mortgage, carry ZERO balances on all your credit cards monthly, buy a TV with 6 months same as cash, buy a car and pay it off in a year and do all this within the last 12 months not to mention earning over $350,000 a year the last 5 years, you are a bad credit risk by Citi's standards…..my guess is only the weathiest 1/2 of 1% will keep a Citi Shell Mastercard.
Todd from Ohio…former CITI and SHELL customer
P.S.
I've been a cardholder for 15 years, going back when the card was administered by Chase…..thanks for nothing Citi and Shell…..I'm 44 and will probably buy hundreds of thousands of dollars on my AMEX over the next many years my wife and I are consumers. .
I got the same letter and was FLOORED. My credit is better today than it was when I initially opened my accounts with Citi. The only thing you can do is either dispute any erroneous information from your credit report or call Customer Service and demand to speak to the Office of the President. I didn't get anywhere but felt a little better venting to the Assitant to the President. I thanked her for Citi treating good paying, long-time customers so poorly, and informed her that I will be closing all Citi accounts that I have. Off to refinance my car…
Thank you for all this information. Until reading this I thought it was my situation. I, too went to buy gas and received a not approved status. I called and asked if there was a problem with the account and was advised there was no problem with it that it was closed. Where is the letter, oh it was sent and tells me that it was Equifax's decision. About a week later I get the infamous letter that advises me not to contact Equifax as they were not the decision maker. Unfortunately I am one of the idiots that they actually made money off of and usually carry a balance. Well I just paid the balance in full and will not give a dime to them (citibank or shell) ever again. After a few deep thoughts I am actually thankful, they saved me a ton of money.
Just think the poor soul that had to deal with me over the phone was the same person that will be unemployed since they decided they do not want to make money off me anymore. I would suggest perhaps a job for her with Equifax as it appears thats all that will be left soon, just reporting agencies.
Thank you for all this information. Until reading this I thought it was my situation. I, too went to buy gas and received a not approved status. I called and asked if there was a problem with the account and was advised there was no problem with it that it was closed. Where is the letter, oh it was sent and tells me that it was Equifax's decision. About a week later I get the infamous letter that advises me not to contact Equifax as they were not the decision maker. Unfortunately I am one of the idiots that they actually made money off of and usually carry a balance. Well I just paid the balance in full and will not give a dime to them (citibank or shell) ever again. After a few deep thoughts I am actually thankful, they saved me a ton of money.
Just think the poor soul that had to deal with me over the phone was the same person that will be unemployed since they decided they do not want to make money off me anymore. I would suggest perhaps a job for her with Equifax as it appears thats all that will be left soon, just reporting agencies.
Thank you for all this information. Until reading this I thought it was my situation. I, too went to buy gas and received a not approved status. I called and asked if there was a problem with the account and was advised there was no problem with it that it was closed. Where is the letter, oh it was sent and tells me that it was Equifax's decision. About a week later I get the infamous letter that advises me not to contact Equifax as they were not the decision maker. Unfortunately I am one of the idiots that they actually made money off of and usually carry a balance. Well I just paid the balance in full and will not give a dime to them (citibank or shell) ever again. After a few deep thoughts I am actually thankful, they saved me a ton of money.
Just think the poor soul that had to deal with me over the phone was the same person that will be unemployed since they decided they do not want to make money off me anymore. I would suggest perhaps a job for her with Equifax as it appears thats all that will be left soon, just reporting agencies.