Phone call from Citibank re: business expenditure on select card.

[R36snowbound]

I have a Citibank Select Visa Signature card and recently applied for a credit limit increase from around $35,000 to $50,000.

Their credit team called me back and informed me that I would not be receiving an increase and commented on some previously made business expenses charged to the card.

The credit team went on to explain that they are now looking at card holders who use the personal card for business transactions and as per the T&C's they MAY NOT award points for what they deem to be "business transactions".

Out of a monthly spend of say $20,000, approx. $3,000 are "personal charges".

I do not use my card for ATO payments, I use to pay misc suppliers and the amount charged in any one transaction varies from $50 to $15,000. I asked how some cardholders can make payments to the ATO and was told we have now become aware of this and are looking at stopping people making ATO payments on their card.

Has anyone else experinced this reaction from Citibank? The guy on the phone also mentioned that AMEX have tightened their points program. I polietly replied duh.... why do you think so many people are all of a sudden interested in Citibank's credit card offerings?

My Citibank run maybe coming to an end......

 

[DeKa]

Why did you tell them about ATO?

 

[DC3]

I don't have this card. However, I'm sure that others have previously advised to just agree with what Citi tells you over the phone and not to argue. Then just keep spending as before, but "mix up" the transactions a bit.

Have I got that right?


Edit: Found something here: http://www.australianfrequentflyer....rogram/citi-select-2-million-point-44990.html Especially read the posts by Cove.

 

[petermac123]

I think they are cracking down - and I feel requesting credit limit increases is one of the triggers to review expenditure.

I know of another instance in the last month or so, where a credit limit increase has been requested and the card then subjected to review. From what I understand, it was explained that in this particular instance, the card was to be limited to a points earn no greater than the credit limit each month.

P

 

[lovetravellingoz]

I asked how some cardholders can make payments to the ATO and was told we have now become aware of this and are looking at stopping people making ATO payments on their card.

..

Not that I explore the ATO much myself, but it is AFF 101 to NOT make such faux pas.

You are letting down the "team".

 

[Simo]

Why would it worry Citi what you put on your card as the merchant has to pay transaction fees so they make money anyway.

 

[eastwest101]

Why would it worry Citi what you put on your card as the merchant has to pay transaction fees so they make money anyway.

Yes hmmm - one man's business expenses are another man's personal spending?

I will go and look at the thread with Cove's comments and see if anyone has argued the point and see what actually is a "business transaction".

 

[Mal]

Why would it worry Citi what you put on your card as the merchant has to pay transaction fees so they make money anyway.

Some banks see it as adding risk to an account (or at least changing the risk profile of an account).

 

[Simo]

Some banks see it as adding risk to an account (or at least changing the risk profile of an account).

As long as the account is not in default trading terms, why would it worry Citi.

My personel CC has been used many times for business expenses and some months it is all business.

 

[R36snowbound]

Thanks for the feedback and apologies if I have commited a faux pas but seriously, Citibank are not going to start looking at payments to the ATO because of one conversation with one customer. My credit history is impeccable, so would have thought a limit request would have not been an issue.

I agree Citibank is following AMEXs lead and cutting back on their points program and starting to enforce their T&C's.

Will be interesting go see what happens over the next few months.

 

[Doug_Westcott]

Why would it worry Citi what you put on your card as the merchant has to pay transaction fees so they make money anyway.

Yes, but the Bank has to pay for the Reward Points

 

[Newk]

mmm yes, a quote from Cove "I still avoid talking to the call centre"

 

[Deleted member]

Yes hmmm - one man's business expenses are another man's personal spending?

I will go and look at the thread with Cove's comments and see if anyone has argued the point and see what actually is a "business transaction".

I wonder how a sole trader goes with this? Fair enough a company is more easily separated from personal.

 

[Deleted member]

Why does petrol bought for my car when I drive it for business different from when I drive to the beach? ( in the same car) or when I fly to Townsville to see my mother in law vs fly to Townsville to see a client?
I am confused.
I tell you what else I find confusing, I once tried to get a biz CC but it became too hard for what was going to be an inadequate credit limit, so i gave up and got a personal card with virtually no limit. With none of the hassle
Why does a finance company lend $60 k + to a person with no assets ( house) middle to low income to buy a car that is completely disproportionate to his / her life style or needs.

 

[Diesellife]

Why does a finance company lend $60 k + to a person with no assets ( house) middle to low income to buy a car that is completely disproportionate to his / her life style or needs.

A car is still considered as asset, regardless how quickly it can depreciate.
Unsecured loan is unsecured. Comparing those two, the former is likely to have less risk if all other things being equal.

Also, business owners are generally considered as higher risk compared to full time employment.

 

[Deleted member]

A car is still considered as asset, regardless how quickly it can depreciate.
Unsecured loan is unsecured. Comparing those two, the former is likely to have less risk if all other things being equal.

Also, business owners are generally considered as higher risk compared to full time employment.

Why is that? Are employees given some iron clad guarantee that they have a job for life?
I don't think so. For every unsuccessful business person I suspect there are many more who lose their job ( sometimes because of the unsuccessful biz person I admit) but at the end of the day I think this ( employment security) is a false premise.

And in any event please explain how an unsecured personal credit card ( with as it turns out 10's of thousands higher spend limit) is a safer bet than an unsecured biz credit card. With a LOW spend limit

 

[Diesellife]

Why is that? Are employees given some iron clad guarantee that they have a job for life?
I don't think so. For every unsuccessful business person I suspect there are many more who lose their job ( sometimes because of the unsuccessful biz person I admit) but at the end of the day I think this ( employment security) is a false premise.

And in any event please explain how an unsecured personal credit card ( with as it turns out 10's of thousands higher spend limit) is a safer bet than an unsecured biz credit card. With a LOW spend limit

Pits purely statistic driven analysis - opinion has a little play here.
No one is saying full time employment gives you a job for life. But an employee would be likely to have a better chance to earn something compared to ordinary business owners. E.g getting a job vs setting up a new business. Furthermore, a company is unlikely to cut staff by 50 or more %.

But most businesses go down hill within first 5 years of operation and business (limited company)'s liability is limited and unsecured debt get paid the last (if any). This makes business debt a little less favorable compared to personal debt.

Im not saying your opinion is wrong, I'm just saying that banks prefer stats & calculated risk, regardless whether it's right or wrong ;-)

 

[DTM1]

I asked how some cardholders can make payments to the ATO and was told we have now become aware of this and are looking at stopping people making ATO payments on their card.

.....

I just don't understand why some people have to be bitter and try and spoil things for others!! :evil:

An as an aside, it's quite clear that you cannot put bus expenses through on your card - you are simply not complying with the Ts & Cs - you have no right to complain.

Unlike your current approach, ATO payments are not in clear breach of the Ts&Cs - there is plenty of room for debate about whether or not they constitute a tax (as intended by the Ts&CS).

You seem to be upset about being caught - not about being accused of doing something which you should otherwise be able to do. I just don't understand why you try to justify breaching your contractual terms on the basis that others seem to be able to get extra points when you cannot.

I'm sorry if this is harsh, but this just happens too often, and really annoys me.

 

[eastwest101]

Pits purely statistic driven analysis - opinion has a little play here.
.....
.....
Im not saying your opinion is wrong, I'm just saying that banks prefer stats & calculated risk, regardless whether it's right or wrong ;-)

Like the AAA rated CDO's in 2007-2008?

I agree with your points however - that is all presumptive that the banks are competent and understand the risks involved, I think that they get it wrong quite often, and I have no sympathy for banks finding their FF points liability a bit bigger than they would like because they mis-calculated their own business model, misunderstood risk or didn't enforce their dubious T&C before.

 

[markis10]

Like the AAA rated CDO's in 2007-2008?

Not really relevant given most of the card issuing institutions in Australia avoided them, unlike local councils and merchant banks. Our banking system is doing quite well with obvious rorts!