Credit card companies are evil

I have an AT&T-Citibank Universal Card. I use it to pay for stuff in the U.S., and the balance is paid in full each month from my U.S. bank account. This month I didn't have quite enough in my U.S. account to cover the bill of roughly $3,000. I had plenty in my Swedish account though, so I set up a wire transfer to move some funds from Sweden to the U.S. It's a good time to buy dollars too, because the price of the dollar has just reached an all-time low against the crown.

Unfortunately, the wire transfer didn't go through in time for the automatic payment of my credit card bill.

Now here's where things get evil. There was enough in my bank account to cover the minimum payment of $20. But because I had indicated a preference of paying the balance in full each month, the credit card company did not withdraw the minimum required payment from my account, and instead withdrew no funds at all, and placed an additional $39 "returned check" fee on my account, as though I was unable to pay my debt at all!

I called the customer service department and explained the situation to them. When I pointed out that the "returned check" fee they charged me was twice the minimum payment they could have simply withdrawn from my account, the representative offered to waive the fee.

I asked how much interest I would be paying on the unpaid balance. That's when I learned about yet another evil practice: when there were insufficient funds in my bank account to cover payment of the full credit card balance, the credit card company automatically raised the interest rate on my account to nearly 17%! I pointed out that the Fed has been dropping rates lately, not raising them, and at this point the rep again agreed to lower the rate back down to the still punitive but slightly more reasonable 10% level.

The credit card company has an automatic mechanism in place to punish its customers with fees and increased interest rates. I explained to the customer service rep that I wanted an automatic system that made sense for me:

Pay the full balance if sufficient funds are available; otherwise, pay the minimum amount due.

That sort of automatic system is not an option, she explained. She told me that she agreed that it made more sense and would be more fair. She also promised to forward my suggestion to her superiors. But with the company's profits dependent on such punitive policies, I see little likelihood that they'll offer such a service in the near future.

Before I concluded my call with AT&T-Citibank Universal Card customer service, I took a moment to thank the representative for her help and willingness to remove the fee and lower the interst rate. However, I also took the opportunity to tell her what I thought about her company's policies. I'm not hurting for money, so I could have covered the fees if I'd had to. Plus, I'm clever and attentive enough to be able to talk the company into reversing some of the damage when something like this happens. But what about people struggling to make ends meet each month? They're punished financially, making their already bad situation even worse. And they probably neither understand why nor have the knowledge to do anything about it. Like purveyors of sub-prime mortgage loans, credit card companies like Citibank are engaging in predatory lending practices, exploiting those least able to bear the burden. It's just despicable.

I'm going to start shopping around for a better credit card. Any suggestions?

Update 2008-03-22 10:00 UCT: I tried to pay the bill today, with the hope of having to pay as little interest as possible at the end of the next billing cycle. Sufficient funds are now available in my U.S. bank account, so I logged into the AT&T-Citibank Universal Card web page and enrolled in online bill payment. I clicked “make a payment now,” and was presented with this error message:

“Due to a recent returned payment from this bank account we are unable to process an online payment request from this account that this time. Please contact Customer Service at 1-800-423-4343 for assistance.”

So now they don't even want my money! Or more to the point, they don't want to make it easy for me to pay off the balance, because if I carry a balance for another month, I'll have to pay even more interest. Looks like I'll have to place yet another call to their long-suffering help desk.

Speaking of that, I received an email from AT&T-Citibank, asking me to participate in an online survey to provide feedback on my recent conversation with one of their customer service reps. I filled out the survey form and left pointed advice on how their service could be improved, also noting, of course, that the woman with whom I spoke was polite and did everything within her power to make me a satisfied customer. It's the system that's broken, not one person — and I made that very clear.

Update 2008-03-22 14:45 UCT: I just called AT&T-Citibank customer service again, to find a way to pay my bill. The customer service department accepts collect calls from customers who are calling from overseas, so this is how I placed the call: I dialled the toll-free Swedish number for the AT&T operator (+46 020-799-111) and placed a collect all to the international number for the AT&T-Citibank Universal Card customer service center (+1 904-448-8661).

It took almost thirty minutes on the phone with three different people in order to arrange for the payment to be made. The first woman with whom I spoke suggested that I pay the debt using my debit card. It's a Swedish debit card connected to a Swedish bank account, but I figured it was worth a try. Nope, no luck. I explained that I had already wired funds to my U.S. bank account specifically for the purpose of paying this bill, and that I would really prefer to pay it from my U.S. bank account. She said that it was not possible because of the previous “returned check” problem. Gaaah!

I spoke with her “supervisor” for a while, and initially made no progress. But after about ten or fifteen minutes, she finally checked with her supervisor, and came back with a solution. She would take my bank account information over the phone and the payment would be made on Tuesday. The information I provided is the exact same bank account information that they have on file for me. It's the same account from which the bill is paid automatically each month, and it's the same account that I configured via their web page this morning. But naturally, I had to provide each bit of information again over the phone. Oh, and she said there would be a $14 “processing” fee. A what? A fee to take money from me? I explained again that this is the same account they take funds from each month, and that I have never been charged before for this service. She agreed to waive the fee as a “one time courtesy,” because I am such a good customer.

So now it looks like I might even be able to use my credit card again in three days. And for those who are keeping score, I have through patience and polite perseverance talked my way out of:

• the $39 “returned check” fee,


• the exorbitant hike to 17% A.P.R. (now back at 9%, resulting in a savings of about $20), and


• the $14 “processing” fee

By my count, that's $73 in fees and interest payments AT&T-Citibank would have liked to have gotten from me this month, but didn't. I feel truly sorry for those among AT&T-Citibank’s customers who are unaware of this sort of gouging or unable to sweet-talk their way out of the punishing fees.