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CitiBank Closes Shell Credit Card Accounts


There were various news reports out in the mainstream press that Citibank has closed accounts on their Shell MasterCard. Apparantly, it started happening on Wednesday. Many cardholders claimed that they never received any letters in advance and found out when they actually tried to use the card.

Citi also confirmed in a statement issued saying they did close accounts of “co-branded gas cards” like Shell, Philips Conoco and Exxon Mobil. If you read the comments in these posts on the mainstream media, a couple of things become very clear.

  • Many of these accounts have good credit and even paid their bills in full
  • After much probing, a couple of Citi supervisors did admit that the account was closed because it was not profitable.

    Here’s my take on why Citi is doing this. They are IMO closing accounts that are not profitable. How so? Most of these co-branded credit cards like Shell Mastercard pay 5% rebates when you gasoline from Shell. These cards do not have any annual fee. Now, I bet that many cardholders simply use their cards for Shell gasoline, charge a couple of hundred dollars a month and even pay in full. Some have even been customers for 20 years. But if Citi has to pay out 5% rebates but can only earn less than that on merchant fees, then that becomes a losing proposition for them.

    That is the reason many gas credit cards have reduced their rebates. For example, the Discover Gas Card no longer pays 5% rebates on gas. They have reduced that to 2% and they put an annual gasoline spending cap on that. Amex Costco have also put annual spending caps. Chase Freedom went from 5% gasoline, supermarket and drugstore rebates to 3% rebates on “rotating categories”. Fact of the matter is that the good old days of straight up 5% cash rebate cards with no tiers or caps are over.

    Citi may still be accepting application on their Shell MasterCard. I just checked their website and they are still offering 5% rebates on Shell gasoline purchases. But I’m willing to bet that if any new cardholders simply uses the card just for gas to earn the 5% rebates, they get their account closed as well!

    If your Shell card has been closed, please share your story and opinion.


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