Gas station credit cards issued by Citibank have been closed without warning
Reports state that the canceled credit cards were active and payments were current
A closed credit card could keep you from getting approved for a car loan
Struggling Banks are Closing Credit Cards Without Warning
By Ross Edwards Wednesday, Oct 21 2009 12:30
Citibank has closed a number of gas station affiliated credit cards throughout the country without much warning to consumers.According to MSNBC, Citibank sent out notification to some customers just two days before closing their cards, and no specific reason was given for the cancellation.Citibank called the closings a “routine review” and declined to comment any further.
One customer stated that her card was active and payments were current when the card was cancelled. Concerned, she pulled her credit report and the only negative item she found was the recently closed Citibank credit card.
A closed credit card could hurt your credit score and lower your chances of getting a new car loan or a low interest rate.Part of what determines your credit score is your utilization ratio, or the amount of credit you have used compared to the total amount available to you.If a credit card with a high credit limit is closed, it could seriously impact your credit score and hurt your ability to get a car loan. Any line of credit closed by the lender rather than the consumer appears as a negative item on the report, so your credit score will be hurt in two ways if a bank decides to cancel a card.
The closed credit cards were associated with Shell, Citgo, ExxonMobil and Phillips 66-Conoco.Citibank has not cancelled those lines of credit cards altogether, and is still advertising and accepting applications for new gas cards.
Just last week, Citibank posted eight billion dollars in losses for the third quarter of 2009 on its consumer credit portfolio, which includes credit cards and home mortgages.
According to Ben Woolsey, director of marketing and consumer research for CreditCards.com, credit card delinquencies are typically tied to the unemployment rate. Citi is most likely expecting defaults on credit cards to rise and closing some in an effort to cut its losses.
Before you shop for a car, you should always get a copy of your credit report, especially if you have credit cards that are used infrequently.If a card is cancelled by the lender and you’re not aware of it, you could find out after deciding on a vehicle that you’ll only qualify for a higher interest rate car loan, or that you won’t qualify at all.To avoid that embarrassing and frustrating situation, you should always know exactly what’s on your credit report before shopping for a car loan.
Comment By: Ronald Sorlinger on Wed, Oct 21 2009 at 2:13 PM
Obviously the only reason these banks are closing cards is so that they can hurt people's credit scores and charge them higher interest. More shady business from the finance industry, good thing we bailed them out!
Comment By: Republican Truth on Wed, Oct 21 2009 at 3:45 PM
We have to many liberals, Democrats, Progressive Republican whiners. The banks patriotic goal is to make money to reward the shareholders and the executives for increase profits. Be a patriotic American and pay the higher rates. Your helping hard working bank executives do a better job with higher pay.
We can't have those Socialist Liberals tell you to pay lower interest rate. If you believe in United States and our freedoms. You should be honor to pay higher rates. Just remember, the more you make us executives wealthier, the more we are include to trickle-down our wealth to you with our good Evangelical Christian Heart to give you business to pay for your salary.
Comments
3 comments on this story so far.We can't have those Socialist Liberals tell you to pay lower interest rate. If you believe in United States and our freedoms. You should be honor to pay higher rates. Just remember, the more you make us executives wealthier, the more we are include to trickle-down our wealth to you with our good Evangelical Christian Heart to give you business to pay for your salary.