Credit cards canceled without warning
Sun 08 Nov 2009
Rick Niles of Laurel, Md., had a Shell-Citi rebate card that was canceled without notice. Citi, the card's issuer, had canceled his two-year-old account without advance warning, even though Niles says he pays the $200 or $300 balance each month and has a high credit rating.
On his way home from work recently, Rick Niles of Laurel stopped at a gas station to fill up and as usual pulled out his Shell credit card to pay. But this time, the card didn't work.
"I thought it was a probably just a problem with the gas station," said Niles, 40, an aerospace engineer with Mitre Corp. in Northern Virginia.
Days later he learned the truth. Citi, the card's issuer, had canceled his two-year-old account without advance notice, even though Niles says he pays the $200 or $300 balance each month and has a high credit rating.
Such cancellations, being felt by consumers in Maryland and across the country, highlight a little-known gap in federal laws governing credit cards. Though Congress has toughened disclosure rules for credit card companies - by requiring 45 days' notice for making significant changes in interest rates or other terms - canceling cards without warning is still allowed.
"I thought it was a probably just a problem with the gas station," said Niles, 40, an aerospace engineer with Mitre Corp. in Northern Virginia.
Days later he learned the truth. Citi, the card's issuer, had canceled his two-year-old account without advance notice, even though Niles says he pays the $200 or $300 balance each month and has a high credit rating.
Such cancellations, being felt by consumers in Maryland and across the country, highlight a little-known gap in federal laws governing credit cards. Though Congress has toughened disclosure rules for credit card companies - by requiring 45 days' notice for making significant changes in interest rates or other terms - canceling cards without warning is still allowed.
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