Thanks to Todd Swarthout for the heads up on this one. In a world where logic is dictated by the guy with the biggest bank account balance, Citi has started notifying card-holders that if they spend less than $2400/year they will be charged a $60 yearly “service fee” in order for Citi to cover it’s “rising cost of doing business”. This also seems to apply to card businesses that Citi has assimilated over the years, including AT&T’s Universal Card that promised “no annual fee for life” when it was created in 1989.
Here’s a scan of a letter one Citi customer got:
(Click to enlarge)
This letter doesn’t seem to be going out to Citi card customers that are carrying a balance either. Apparently raping your customers is getting expensive, that’s unfortunate.
Todd points out the real-world implications of this charge which will get customers that don’t carry a balance to leave Citi, leaving them with a primary pool of customers that either pay late, don’t pay or carry balances on their card.
Apparently in the banking business, even when you factor in bankruptcies and defaults, the profits from customers carrying balances at 15% and higher are much more than the profits made from transactions on customers that carry no balance.
Citi wants more irresponsible customers and less responsible ones.
Where has the ethics and decency gone from banking? I’m all for making profits, it just seems like some of these policy changes are so aggressively targeted at customers and punishing in nature I don’t understand the motivation except for trying to squeeze lemonade out of a basket of kittens.
It just seems unnecessarily perverse.