Posts Tagged citibank

A word of warning to Citibank credit card holders: your no-tax internet shopping days may be over.  If recent reports are correct, Citibank is now charging foreign transaction fees to customers who use their cards over the web to order from international companies.

If you’re in the US and order shirts from a Hong Kong supplier, for instance, you’ll get slapped an automatic 3% foreign transaction fee, even when you’re billed in dollars.  Do you host your websites with a UK-based hosting company?  Your monthly hosting bills will now come with an additional 3% tacked on to it.  If you’re a Citi card holder, better check the address of the merchant you’re buying from before making any purchases online.  Otherwise, you could suffer through considerable charges.

Since many people shop online almost as much as they do in physical stores, that means a whole lot of credit card holders will end up affected by this change.  Can you imagine how much money the credit card issuer stands to make on this?

While I totally understand Citibank trying to recover their losses during these trying times, this is really a bad way of going about it.  I, for one, use my Citi card for a lot of recurring business-related international bills and have already begun using a different payment method.  Will Citibank make more money if I actually stop using their card, as well as thousands of other people who don’t appreciate a three percent tax?  I doubt they will.

While Citibank’s ThankYou Network brings with it many benefits, they have more than a few unattractive features that can really turn you off from using them as much as you want to.

The biggest beef, for me, is the need to continually take account of my accumulated points. Most of Citibank’s credit cards add an expiration date to points earned, which varies according to the specific terms and conditions of the particular account you own.

In exchange for the continued hassle of tracking your reward points, however, Citibank usually offers a better system for earning points. Unless you’re vigilantly keeping tabs on your rewards, though, they can all go away in an instant.

The second problem with the ThankYou Network is the redemption rate on the rewards points. Like other networks, the ratio usually gets better with the more points you’re going to redeem. Since the points expire, however, you can’t wait the few years that most average credit card users need in order to qualify for redeeming top-value items. As a result, many end up redeeming their points at rates that are frequently in the 50% to 70% range, instead of the ideal $1 for every $100 you spend, lest lose the privilege entirely.

In general, the ThankYou Network is a great rewards program for heavy credit card users who accumulate points fast and plenty.  If you’re not a heavy a credit card user, you might want to shop for a different issuer than Citibank or, at least, find a Citi offer with non-expiring points.