In September, I reported that Citibank was shuttering a bunch of inactive lines of credit (link here). The accounts were closed "due to the length of time that has passed since it was last used," I wrote at the time. Now hear this: Citibank is, instead of closing accounts, now slashing limits across the board. A reader of mine was kind enough to share the contents of the letter he received.
Before getting to the letter, it's important to first explain the nature of these consumer lines of credit. These lines often have higher interest rates. They don't -- and shouldn't -- get used very often. However, they can serve as convenient bridge loans in a pinch. When Citibank rolled out its Citi Flex line of credit product a couple years ago, I applied for the account. I figured that it would be a nice complement to the rest of the credit products that I had. Turns out that I never used it. Never ran into the proverbial "pinch." Citibank, after about a year of non-use, shut my account down.
Here's what I wrote about the CitiFlex account when it got closed last year:
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 CitiFlex product altogether. Existing CitiFlex 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).
And, so, fast forward to today. My reader received a letter from Citi yesterday. This is what Citibank had to say:
"As always we appreciate your business and want to let you know about a change to your account. Based on your spending history and since you are currently only using a portion of your available credit line, we have lowered your credit line to $X,XXX." I redacted the amount to preserve the privacy of my reader. His previous limit was in the mid 5 digits. "We value you as a customer and look forward to continuing to serve you in the future," Citibank concluded. I always chuckle when they tell customers that they're looking forward to serving them in the future.
So what should my reader do? Very simple. I understand that Citibank is willing to reinstate limits if you call them up and ask (hat tip Creditboards). The last phone number that I had for CitiFlex was 866-720-2495. You can always refer to the phone number in the letter -- if it's different from the one above.
At this point, Citibank should just do what I proposed the last time we went through this. It should discontinue the product (which it has) and it should close all of the active accounts that remain.
Clearly, this product has been a regret for Citi. It was an ill-conceived product. And it's been an unmitigated failure.
In the meantime, see all of my Citibank coverage here (link).