Today, 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.
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