Tuesday, September 2, 2008

From the "Use it or Lose it" Department: Citibank on a Rampage with Citi Flex

Over the weekend I received a closure notice from Citibank. It seems that I did not use my Citi Flex Line of Credit account enough. As a result, the account is now closed. (Update (Sept. 10): on my credit report, it's being reported as closed by grantor, rather than closed by the consumer. Would have been nice if Citi had noted that it was closed by me. Oh, well. Another interesting thing is that Citi reported the limit on the account as well. For the past year, it has never reported a limit.)

And I'm not alone. Several members over at CreditBoards.com have reported closures as well. All of us were shut down for the same reason. The account was closed "due to the length of time that has passed since it was last used." For me, it was never used. So, yeah, I guess it's been some time since I last used it.

Still, I'm not sure what Citi expected. A Line of credit isn't, at least for me, something that gets used very often. It's used when you need cash. When credit cards just won't do, having a line of credit is a nice tool.

Frankly, I don't think Citi knew what it was doing when it rolled out this product last year. From the beginning, it's been a subpar product. There was no online access, you had to request checks over the phone, and, I believe, the checks always had an expiration date on them. Worse, it often took weeks to receive new checks.

Citibank has now stopped offering the Citi Flex product altogether. Existing Citi Flex accounts will continue to get serviced. This weekend's round of closures, though, makes me think that Citi would rather this product go away completely (including all of its customers).

So, for those of you who have this account, I can only advise one thing. If you haven't used the account -- but want to keep it open -- you might want to give it some usage. If you don't, you may find it closed sooner rather than later. Here is the phone number for Citi Flex (CitiFlex): 866-720-2495. You can use that number to check the status of your account.

You've now been put on notice. Indeed, use it or lose it.

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Anonymous said...

Citi has always been a pain to me.

Credit Matters said...

Did you have the Citi Flex account? Or is Citi just a pain on a general basis?

Citi, though it's been a bit stingy, has treated me fairly well over the years.

eldarwen999 said...

I have not used my Sears Mastercard since (maybe) October of 2007, would that mean that I will lose that line of credit? It is my oldest account and backed by Citi.

Credit Matters said...

Eldarwen, this particular article was geared toward holders of the Citi Flex line of credit. If you're not using this Citi Flex product, you should use it.

You, however, are talking about the Sears MasterCard. So this article really doesn't apply to you.

BUT, you should read an article of mine called: "Don't Let Your Credit Card Accounts Get Dusty." There, you'll read about FICO and how it ignores accounts that go inactive. The article was written on July 30.

In the meantime, creditors in general are looking to trim exposure. I'd make it a habit to use your cards more often. Each of my cards is getting use at least every three months.

Take care.

eldarwen999 said...

Then I should use it in the next month for a pack of gum and a soda.

Credit Matters said...

Exactly. Just give it some use, Eldar. You just don't want your credit card companies shutting down your cards for non use.

NostalgicButterfly said...

Yea, I finally had use for the line of credit after opening it a while back! I called today and was told it was closed last week!!!!!! And they wouldn't re-open it, I had to apply again!!!! I am so pissed!!!!!!!

Credit Matters said...

NB, sorry to hear that. Citi has been moving quickly to close these accounts down.

It's unfortunate that Citi doesn't understand how personal lines of credit typically work. These aren't debt instruments that we use very often. They're used for that rare occasion when a credit card won't do.

Oh, well. The line never reported a credit limit, so this will have no impact on me (from a utilization standpoint). Some ten years from now the Citi Flex account will fall away from my credit report.

Until then, it will serve as a reminder that we've got to use them (our credit cards) or lose them.

NostalgicButterfly said...

Will it show up on my credit report as closed? Will that affect my score? Do you know? I hate for any account to get closed..... this totally sucks......and the manager was telling me to reapply.......and now i learn that its no longer offered!!!! This is a total nightmare!!!!

Do you happen to know any identical products from any other bank?

Credit Matters said...

Anon, your account will show as closed. The only question at this point is how the creditor is noting the closure. Closed at consumer's request? Or closed by credit grantor. The notation doesn't harm your score, but I don't like seeing closed by credit grantor notations.

The limit never reported, so there won't be an impact on your score. The account will now remain on your credit report for about ten years (until it finally falls off). It will continue to help the age portion of your credit history. Indeed, when it finally does fall off the report, it will be 11 years old.

Credit Matters said...

As for similar products, I have a personal line of credit through Pentagon Federal Credit Union. I've had it for more than two years. Never used it. Still remains open. Penfed probably understands that these LOCs are lightly used.

Bank of America also has a LOC product -- though they've been known to close them for non usage.

Personally, I would stick to the credit unions and their LOC products. Seems to be the smartest route.

Credit Matters said...

Just a quick note that I have updated this story. The account now appears as closed on my credit report. Closed by credit grantor. Sigh.

Anonymous said...

have/had citiflex acct. They just informed me the interest rate will almost double next billing period. from 8.29 to 15.76 they did allow me to opt out so nothing will change except no longer have that credit line but wonder how this will affect my score

Anonymous said...

Don't understand Citi's logic. Citi said they increased interest rates "across the board". For me that was 8.99 to 14.99. Never had a late payment. FICO over 800. AND they reduced my line from 20k to 15k because they said in the history of my line, "I've never used it above 15k". What's the logic?

shahrukh said...

Hello, I have a citibank dividend world mastercard. Credit limit 20,000. Have about $900 as a balance. I received a letter from them yesterday stating that I had 2 choices. Either transfer 5000 from another card or the account will be closed in May 2010. Been with CitiBank since 1990. My credit score is 770. What do you suggest I do? I have 2 other cards with smaller limits, but with zero balances.

Anonymous said...

One Minute Citi Flex couln't give me enough money, then over night without any warning they cut the credit line and trippled the APR! Why should we be penalized for these organizations greediness. No wonder this country is in so much debt.

Anonymous said...

My Sears card?Citbank, had lowered my credit limit a few months ago. So what,who cares, cut your own throat, just voted not to buy at Sears. Now I get a notice today December 11, 2010 dated 12/01 that they are closing the account due to excessive amounts, ratios, and number of accounts with delinquency. Checked my Equifax. No late payments (only two in 07). All paid as agreed. Only one (Citi/BP closed a year ago, because it was an extra account. 300.00credit limit on a gas card; whoopee~!)
Obviously, something is going on with them. How do I dispute the "potential negative accounts" when they don't appear to be negative.
The credit card companies deserve whatever they get. As far as I'm concerned they are vultures and outright criminals, as they can jack your rate to 29.9 whenever they want, and do not have to answer to anyone for it.
Get free money from our government, loan it out at 8 %, then jack it to 29%. Wish I had a business with those kind of margins. And they still can't make money being crooked. The end must be near!

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