Citibank closes number of credit card accounts; credit scores may be affected
No law prevents banks from closing down credit accounts without warning.
The new Credit Card Consumers’ Bill of Rights has done nothing to change that.
But when Citibank recently closed a number of Mastercard accounts — co-branded with oil partners such as Shell, Citgo, ExxonMobil and Phillips 66-Conoco — it did so on very short notice.
Citibank canceled a number of credit card accounts effective Wednesday Oct. 14, but the bank’s letter telling customers so was not mailed until Monday, Oct. 19.
The company has been unwilling to tell the media why there was a delay in notifying customers, how many credit card accounts were affected, and how much available credit the cards represented.
Citibank has not discontinued the oil partner card program, and in fact is still accepting new customer applications.
Financial analysts point out that the bank posted $8 billion in consumer credit losses for its third quarter last week, including both mortgages and credit cards.
Over the past few months Citibank has sharply reduced its outstanding credit to consumers.
Closed Credit Card May Affect Your Credit Score
Banks report all canceled accounts to credit bureaus.
When one of your credit card accounts is closed it may affect your credit score — particularly if the card had a high credit limit. Credit that is no longer available could negatively affect the so-called ‘utilization ratio,’ the more so if you carry a high balance on another credit account.
If one of your credit card accounts has been closed, contact a credit bureau to see whether it has affected your credit score.
