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Citibank readyCredit - Give yourself a present this xmas

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netaddict

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Received an intersting offer from CitiBank re my ReadyCredit account. Found it rather intersting given this recent post: http://www.frequentflyer.com.au/discus/viewtopic.php?t=1412

The offer is for every $500 you spend they will credit back $20. Offer runs until the end of the year. Now be interesting if it works on credit balances :)

Looks like I won't be getting one of those letters to say pay the $160 fee.
 

Damien

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That could be very interesting. I wonder if it's for everyone?

I'm building a house at the moment, so I'm using that chequebook every time the phone rings... :(
 

netaddict

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The letter indicated since I haven't used it much lately so I'm guessing it's targeted marketing.
 

JohnK

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netaddict said:
The letter indicated since I haven't used it much lately so I'm guessing it's targeted marketing.
Goes back to one of the earlier posts about businesses screwing their best customers.

I have a large outstanding balance on the ready credit account and probably use it at least once a month. Yet if you hardly use it you get offered $20 back for each $500 spent. I can really see the logic in that. :?

They know they have me because of my large outstanding debt but send out marketing promotions to try and keep customers who hardly use the card and more than likely will not use the card that often and pay off the balance in full anyway when it is due. :?

I find it really amusing. :D
 

NM

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JohnK said:
They know they have me because of my large outstanding debt but send out marketing promotions to try and keep customers who hardly use the card and more than likely will not use the card that often and pay off the balance in full anyway when it is due. :?
This promo is not to try to keep existing low volume customers. They don't have to worry about losing those customers since there are no fees, so no need to cancel a lazy card.

The incentive is for low volume users to use their account more, and hence permit CB to collect more merchant fees and interest from accounts that would otherwise be idle. Makes good business sense to me. Incent the behaviour you desire to see in your customers.
 

JohnK

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NM said:
The incentive is for low volume users to use their account more, and hence permit CB to collect more merchant fees and interest from accounts that would otherwise be idle. Makes good business sense to me. Incent the behaviour you desire to see in your customers.
Don't disagree with you just would be nice if it included people that use the card frequently as well.

Dangle the carrot in front of a loyal customer as well not just someone who hasn't used their card in 6-12 months.
 

NM

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JohnK said:
Dangle the carrot in front of a loyal customer as well not just someone who hasn't used their card in 6-12 months.
It might be a nice gesture, but could be a waste of a carrot if the customer is already loyal and likely to remain so. The trick is to know when someone is likely to switch from being loyal to you to being loyal to some other supplier. And if you believe the customer perceives value in your product, you may consider their loyalty assured. So it may be a better investment to use your limited number of carrots to incent a behaviour change rather than incent a status quo that is likely to remain without the additional supply of beta carrotone.
 

JohnK

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NM said:
It might be a nice gesture, but could be a waste of a carrot if the customer is already loyal and likely to remain so. The trick is to know when someone is likely to switch from being loyal to you to being loyal to some other supplier. And if you believe the customer perceives value in your product, you may consider their loyalty assured. So it may be a better investment to use your limited number of carrots to incent a behaviour change rather than incent a status quo that is likely to remain without the additional supply of beta carrotone.
I think it would be a nice gesture.

Your points are quite valid but somehow I don't quite agree with clever marketing gimmicks that target specific individuals at the expense of loyal customers.

We can keep going around with this in circles but is still doesn't change the fact that only certain people have been targeted by the promotion. Doesn't help me but good luck to any that have received this promotion.
 

arun

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I got this letter - $20.00 for every $500.00. As I have stated in the other thread, I believe it is for customers like me who has a large debt at 4.9%. By getting me to spend money and collect 20.00 for every $500.00 until Christmas, effectively they will be getting us accumulate debt at $17% (or 18%). All repayments will go to settle the 4.9%. It is a technique to convert the low interest debt to high interest.
To be honest, with the current minimum repayment, I can take up to 5 years to pay my balance at 4.9% interest. As this is even lower than my homeloan rate, I am in no hurry to pay this off.

In the mean time, has anyone checked the T&C regarding their right to introduce fees midway like this. I do not want to call and start an argument as I am not prepared to cancel this facility and repay the full amount.
 

New Chump

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I'm like Arun - I have a large debit balance for which I'm paying 4.9%. Even with the new $160 fee, I'm still better off with the ReadyCredit loan as opposed to drawing down on the home loan (@ about 6.5%) to pay it off. But the benefit in keeping the ReadyCredit loan is getting marginal. If I didn't have a large ReadyCredit debit balance @ 4.9% I would be cancelling my ReadyCredit asap.

Two questions for the ReadyCrediters amongst you:

1. Is the new $160 fee an "annual" fee? Citibank describe it as a "facility fee" and tell you the date on which it will be charged - Citibank don't say they will keep on charging it each year. Or am I being naive here?

2. In terms of the "cash back" arrangement, available until 31 December, where you are credited with $20 for every $500 worth of spend - does that mean we can write a cheque to ourselves (as NM suggests on another thread) for the full account limit, repay it the next day, and Citibank will pay us $20 for every $500??

For example, for a ReadyCredit account limit of $25,000 with a zero ReadyCredit balance, you pay $25,000 from ReadyCredit into another account by cheque. You BPay it back to ReadyCredit the next day (although it may take 3 days or so for the cheque to clear). You pay interest at 15.75% on $25,000 for 1 day ($10.78, or say $32.36 for 3 days). Citibank then gives you cash back equal to $20 for every $500 of spend, which for "spend" of $25,000 equals $1000 (ie 20 x 50). Surely that can't be right? :? I have never heard of a bank being that generous. Am I missing something??? Writing a cheque like that and repaying the balance a few times between now and 31 December would be significantly more advantageous then keeping a large ReadyCredit debit balance @ 4.9% for life.



NC
 

NM

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I have a readicredit account but have not received the letter about the $160 fee nor an offer for $20 for $500 spend.

However, if I do get the second offer, I could take serious advantage of it as described by newchump. But instead of paying lots of interest, I would use much smaller amount and more regular cheque writing.

So far example I have a $0 balance on my readicrdit (as I do). And I have a few thousand dollars available in a savings account that is not earning much interest.

So I BPay say $2000 into Readicredit account and walk down to am ATM and withdraw as much cash as my daily limit will up to that $2000 amount. Then deposit the cash straight back into my savings account.

BPay is processed overnight, so I can continue this process every day until the end of the promotion. So long as the ATO does not try to nab me for money laundering or undeclared cash income! Might be difficult to explain the manipulation of the promotion to them, and at best they will want me to declare each $20 as income!
 

kt

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suggest anyone trying to take advantage of the cashback offer be careful. On the Citibank website they have details of a different (but maybe the same) cashback offer on their credit cards. The amount of the cash back is based on the balance outstanding at the end of the month.
 

NM

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kt said:
suggest anyone trying to take advantage of the cashback offer be careful. On the Citibank website they have details of a different (but maybe the same) cashback offer on their credit cards. The amount of the cash back is based on the balance outstanding at the end of the month.
That would make much more sense than just volume transacted. I have not received the letter so don't know what the offer entails or the terms and conditions.
 

kt

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the letter is very brief and the ideas outlined above would work according to the letter. But i haven't been trying to confirm with the call centre and on email. Still waiting for a response.

This is the quote form the Citibank site on their cashback card
Citibank Cash Back®

Every time you make a purchase or pay a bill with your new Citibank Cash Back?? Card, you get Cash Back^. Your Cash Back rate is determined by the opening balance on your monthly statement, less credits and payments. This rate is then multiplied by your spend (statement's total purchases and bill payments) to calculate your monthly Cash Back amount.

Simple isn't it??? lol
 

NM

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kt said:
Every time you make a purchase or pay a bill with your new Citibank Cash Back?? Card, you get Cash Back^. Your Cash Back rate is determined by the opening balance on your monthly statement, less credits and payments. This rate is then multiplied by your spend (statement's total purchases and bill payments) to calculate your monthly Cash Back amount.

Simple isn't it??? lol
Sounds like it may be limited to "purchases and bill payments" so may not include cash and cheque withdrawals.
 

JohnK

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NM said:
Sounds like it may be limited to "purchases and bill payments" so may not include cash and cheque withdrawals.
A cash or cheque withdrawal that leaves an ever increasing outstanding balance shouldn't be treated differently to a purchase or bill payment.
 

netaddict

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Decided to send a secure message off to Citibank re having your account in credit or a zero balance and still earning the $20 per $500 spent. Received this reply:

"The $20 Cashback applies for every $500 spent. Accounts in credit or with zero balance will have no effect on the aforementioned promotion as this is based on the actual spend."
 

e_wolfe

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readycredit christmas cashback

I've been rotating several thousand dollars daily during this promotion. I wonder if they will really pay up? It says in the letter that "The eligible cash back amount will be accumulated over the promotional period and credited to your account statement in December 2005 and January 2006." I just received my December statement - but there was no cash back amount. Has anyone recieved any cash back on their December statement?
 

netaddict

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Re: readycredit christmas cashback

e_wolfe said:
I've been rotating several thousand dollars daily during this promotion. I wonder if they will really pay up? It says in the letter that "The eligible cash back amount will be accumulated over the promotional period and credited to your account statement in December 2005 and January 2006." I just received my December statement - but there was no cash back amount. Has anyone recieved any cash back on their December statement?
Yes, received $440 about a week ago.

How were you rotating cash through the account?
 

e_wolfe

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Yes, received $440 about a week ago.

How were you rotating cash through the account?
I wrote cheques from my ready credit account and deposited them into my home loan (not with citibank) and then did redraws from my home loan directly to my ready credit account. Did you recieve the $400 on your statement date?
 
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