Magazine article American Banker

How an Offer of 'Free' Miles Can Take You for a Ride

Magazine article American Banker

How an Offer of 'Free' Miles Can Take You for a Ride

Article excerpt

A general rule of thumb is that customers who use two or more of a bank's services are less likely to switch banks.

It's the same with credit cards. Customers who use a card to make two or more automatic payments -- such as health club dues or utility payments -- are less inclined to switch cards. It makes you wonder why credit card companies spend so much time and money trying to get consumers to accept new cards.

I mention this because I wish I had not responded to a recent cold call from Citibank in which I was enticed to sign up for a business MasterCard, even though I was happy with the Citi AAdvantage Visa I have been using for 13 years.

I had been told the new card had no annual fee, I could keep my Visa, and I would receive 10,000 American Airlines miles for taking the new card.

When I was then billed a $75 fee for the new card, I immediately canceled it and cited the incident in my column as an example of telemarketing dishonesty. A call from a Citibank manager the day my column appeared convinced me that the fee was a human error and that the MasterCard account was still valid, and I thought the matter was closed.

But a week later I took out my Citi Visa to pay for lunch, only to have the waiter tell me the card had been refused. This is always embarrassing, especially when one is entertaining a guest or a client.

After waiting on the restaurant's pay phone for 30 minutes, I was told the Visa card had been canceled because I had opened a MasterCard account -- something I was told would not happen.

All ended well when, after I spent an hour on the phone, a manager un-canceled my Visa card. But I learned my lesson. I should have declined the MasterCard offer, as I had done with Citi's numerous previous offers.

Why did I accept this offer? Three reasons: The new card was supposed to be free, I was supposed to be able to keep my Visa, and, I admit, I was greedy for the 10,000 miles Citi was offering. …

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