my friend called me last week to let me know he received a letter in the mail from his business credit card issuer informing him they were going to close his credit card. he has a good credit score and has always paid on time and in full. i can only assume the credit card issuer is closing down all or most of their business card accounts! has anyone else received a letter like this, either for personal or business cards? i rely heavily on my cards even though i do pay them off in full each month. it would just be a huge pain to have to go through all my accounts to change the cc info to another card.
Who is this credit card issuer? If American Express I wouldn't be surprised. They close down accounts real fast especially in these days of hard economic times. They've been burned to the tune of millions in defaults/bankruptcies.
it is citibank. i have the same card but i haven't been notified yet, so i wonder if they are being selective. but again, he's got a good credit score and payment history, so who knows.
Maybe their closing down some of their good accounts to make it look like their hurting for the bailout program for credit cards.
You said it was a business card. If it's from the business where he works, it could be that the business has changed who they are doing business with. That happened in my company about five years ago. The company makes a contract for a certain period of time. When that contract was up, t hey re-evaluated and found out they could get a better deal elsewhere. So all of our accounts at the old company were canceled, and we got new cards from a new lender. If that's the case, his company should be able to let him know. If I were him I'd check with my company anyway.
he is actually one of the business owners, so the cancellation of the card is a complete surprise to him. if i find out more, i'll update this thread. jjgross, that is an interesting theory!
I doubt that jjgross's theory is correct. Right now they're trying to get prime paper and get their balance sheets looking better so that their stock goes up. Shareholder value is still the most important thing to most companies. They could, however, be cutting back on business credit.
But sometimes in order to get more credit they salt the mine in order to get more investors what better investor than the fed's.Sure their getting their bottom line looking good,after all if you invest you want a good roi.
Well I've never heard of this before now. I'd certainly be looking into it, especially from CITIBank. Seems funny. And I certainly hoping some of the folks, especially jjgross, here aren't correct when they say things like ............. 'Maybe their closing down some of their good accounts to make it look like their hurting for the bailout program for credit cards.' That sure does scare me. Sam .............
These banks are all subject to a lot of regulation by the OCC and the SEC, among others. I seriously doubt that they would close accounts to get bailout money. It would end up costing them a lot more in the end.
The friend who got the letter needs to contact Citi and ask why they are closing the account. Perhaps it is something erroneous that he can correct. Or perhaps they are getting rid of part of their portfolio. But posting here isn't going to answer the question. Assuming will get you nowhere. Until the question is asked, and answered, from Citi, speculation is just that. He needs to ask them why, then perhaps it will be clear who else may be in danger. I have multiple personal accounts with Citi and I have gotten no notice of any adverse action to date.
Hedwig your right until they contact Citi and find out why there closing his card,then we can all put forth all of our theory's and personal dealings with Citi our any other company.I mean i could really bad mouth a lot of company's who i don't agree with but it would be just my acting on a thought,not a real experiance.
Just a hunch, but possible: Banks are afraid that times will turn worse, more layoffs, more job losses - forcing more and more people into defaulting/filing bankruptcies.
my friend called citibank asking why his card was being cancelled. their response was that this particular card was being "discontinued" because it was not popular among business owners. i have a hard time believing that because it was actually a really good rewards business card. i think the issue is that it was too expensive for citi to have their card members receive rewards through that card. also, instead of transferring his card membership to another card, they said he'd have to apply all over again to get another card from them. well, i have heard that the next crisis after mortgages is going to be credit cards.
I know that they do discontinue cards from time to time. It really could be that it wasn't that popular. A larger business doesn't want rewards cards, they want to negotitate terms for lower rates or a rebate or something based on total usage by the company. With a lot of rewards cards, the rewards can only be used by the cardholder. Companies want cards that give advantages to the firm as a whole, not the cardholder. I realize that in a small business letting individuals get rewards may be fine (especially if it's mainly family), but a larger business wants the advantages on the bottom line of their balance sheet.
