Posted by Chuck on December 3, 2015
Checking Accounts

Published on December 3rd, 2015 | by Chuck

63

PSA: Don’t Close Citigold – Downgrade It!

Many of us signed up for a Citigold checking account within the past year for one of a few different bonus offers, see Step-by-Step Guide to Citigold 50,000 Points Checking Bonus.

So we’re now holding after getting the bonus. Time to close the account, right? It has a $30 monthly fee after all.

Not so fast!

The Citigold account package comes with a $30 monthly, and when you close out the account Citibank apparently charges that fee for the month the account was closed. Not only will you get hit with a $30 fee after the account is closed, you may also get hit with a $34 overdraft fee as well.

The best way out of this mess is simply to downgrade from the Citigold package to the Citi Basic package. To keep the Basic account package fee-free, there needs to be $1500 in the account or have a direct deposit and bill pay.

Be sure to put $1500 in the account, and then downgrade it. A month later, it should be safe to close out and request a check for the balance. I verified with Citi chat that if there is a balance in the account you can request to close the account, and you’ll get a check within 5-7 business days.

We wrote in the previous post a more creative reason to keep the account as a Basic without closing it. Whether or not you plan on keeping the Citi Basic account (and tying up $1500), you definitely want to initially downgrade and not close. Save the hassle of having to deal with those fees.

On a related note, we’ll mention here that it’s worth doing the downgrade well before the end of the month since it’s not instant and you want to give it time to settle before the monthly fee comes due.

HT: Reddit

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63 Responses to PSA: Don’t Close Citigold – Downgrade It!

  1. Yumeng says:

    Any idea if you still qualified for the $100 discount for the Prestige card if you apply for it after the downgrading?

  2. Alonso says:

    Agreed, I downgraded my account, it was a painless process when done via chat.

    Here’s hoping the Prestige benefit continues when I get hit with the AF this upcoming year!

  3. Ted says:

    Still have not gotten my 40k thank you points yet.

    Opened in July, bill paid in July and August. $30 already charged…….

    Now this crap

    • Max Loranzo says:

      Try calling Citi. On one of the two accounts I manage I got the AA bonus miles posted very quickly after completing the requirements. On the other account I didn’t get the bonus, even after 90 days passed, so I called and the issue was fixed.

    • John says:

      I don’t see a problem with the flow – Just follow the rules. But what is puzzling me is how come you paid $30 only once in close to 5 months of having the account and how come you have not received the bonus yet. You may have skipped a step somewhere.

      • Ted says:

        I had 20+ citi credit cards in the last couple years. Their bonuses have been posted with no issue. Been calling a few times, they see I have met the requirements they just keep doing the it will post next month thing.

  4. savemesf says:

    I guess I was lucky – got the points and closed the account before any fees hit.

    I think it’s too early, but has anybody had success double dipping on the TY points bonuses? I.e., got the 40K points from the “small business” offer earlier in 2015, closed the accounts, and then opened new accounts to get the current 50K bonus offer?

    • Mike says:

      Not a good idea. If Citi deems you to have earned the equivalent of $600 or more in checking account bonuses in a year they will inform the IRS and you will owe taxes on those points. Wait for an offer in 2016.

      • WorldTraveler says:

        I know that not all bank bonuses are informed to the IRS. However, I believe that all bank bonuses are supposed to be filed as taxable income, so you owe taxes on those points anyways.

        • Mike says:

          The difference is the IRS will know about it now whereas they normally wouldn’t.

          Citi is definitely one of the banks that will inform on you if you go over $600. Google it for other reports.

      • savemesf says:

        If one signed up for new accounts between now and the 12/31/15 deadline for the current 50K TY points offer, the the bonus would not be earned / paid until 2016. So there’s not any 1099 issue.

        Just curious if anybody has been able to churn the bonus. I think a couple people in the other thread were going to try.

  5. Max Loranzo says:

    A few more public service announcements:

    1) To downgrade the account you need to call, the chat doesn’t work.

    2) Before downgrading, make sure you have some checks or order them (they’re free). I believe the Basic account doesn’t give you free checks.

    • chris says:

      I had no problem downgrading my Citigold to the Basic via chat just now and it took about 5 minutes. (And I’ve been told by more than one person I’m definitely not special.)

  6. Leon says:

    Hi Chuck, a short question! I tried finding the answer online but couldn’t 🙁

    I currently have a basic checking account with Citi but I want to get into the Citigold promo but the rep told me I won’t be qualified for the promo. The T&C doesn’t seem to prohibit churning, so is it possible to close this account and then open Citigold and receive the bonus? Thanks!

  7. snoptro says:

    Thanks for the good advice Chuck!

  8. Anthony says:

    No one has mentioned what happens to the points if you close the account. I was under the impression that you lose the points if the checking account is closed. The points do not mix with points earned on a credit card and are categorized separately. It seems though, that everyone is closing their accounts quickly before the fee hits. What happens to the points then?

  9. Adam says:

    Also, you can ask for a fee stop to be placed on your account. The rep that I was speaking with put a 6-month fee hold on the account I guess. I’ll be checking in a couple weeks just to make sure that everything is finally closed out.

  10. Matt B says:

    Is the 50k TYP offer still going for those of us that haven’t taken advantage so far?

  11. David says:

    Great advice! I got hit with fee #1 for the 30k AA offer which I applied for a month before the 50k offer hit. Still no miles. They’ve confirmed I met the requirements twice and swear they’ll post this month.

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  14. PaulSu says:

    Today my wife tried downgrading citigold account, after she combined 40k thankyou points to her citi thankyou premier credit card account. The rep said there is a block (lock) on her gold checking account and performed some review. After that, the rep asked my wife if she was taking advantage of the promotion. My wife’s English is not good and did not know how to answer the question properly, so she halted.

    Is there any rule to apply lock on the account from closure or upgrading for the gold checking account which already has been used for promotion?

    • PaulSu says:

      To make my question more specific:

      1. is it possible my wife’s citigold account was locked because she combined points earned by gold account to other credit card account?

      2. any advice on how to ask for a account downgrade?

      (Reviewed the account’s disclosure and did not find there is anything saying you can not close or downgrade the account after promotion is got.)

  15. Carl says:

    I called on the Citigold account after I performed the qualifying things and asked how to avoid the check account fees. The lady on the phone told me I could downgrade to basic as I had already met the qualifications for the bonus TY points. I just had to have an ADB of over $1500 in the account which is no problem.

    But now I am worried that maybe she had it wrong? I have yet to see the bonus points and it has been like 3+ months. (This is from the last promotion that I got into days before it ended) So far ass I see is two posts of 450 TY Points via that account.

    My plan has always been to transfer those TY Points once they appear because of the 60 day cancelation thing. Is that a bad plan as well?

    Did I help them sucker me into not getting any bonus points? I was told all along that likely February before my points post either way. If anyone can illuminate things for me more I would be appreciative!

  16. John says:

    Hi Chuck,

    If we downgrade the Citigold Checking to a Basic Checking, can we still open the savings plus account? Is there any fee for the new savings plus account?

  17. Steve says:

    I signed up with the American Airlines point bonus. Should I receive the points before downgrading?

  18. Mark says:

    I have TYP from premier CC and I’ll be getting 50K TYP from citigold checking. I’m told Citigold TYP expires after 60 days of transferring after you close the account. How do they know which points come from where? I would like to transfer points to some airline within 60 days, just curious how do they keep track of which points come from where?

  19. J T says:

    Downgraded to basic checking through SM, though it did take a few days before it changed. Still retained the Citigold banner after conversion, and I had planned to apply for the TY Prestige w/ (hopefully) discounted AF. Just noticed the gold banner is gone, one full billing cycle after downgrade. Don’t see any use keeping it open anymore.

    • J T says:

      And I did receive, transfer & cash out the 40k TY points from the Citigold checking bonus before downgrading. The bonus was weeks overdue and took several secure messages and replies before being approved, even though I completed all the req without question. Ended up paying 3x $30 monthly fees on the account before I could get the bonus.

  20. Gene says:

    @Chuck
    was charged my first monthly fee 5 days ago.
    bonus just posted.
    safe to convert gold to basic/access acct right now and then close basic/access acct before end of bill cycle when next fee hits?
    thanks!

  21. Betty says:

    Downgraded to the Basic Package from the Gold after the 50,000 AA points posted last week. The paperwork just came today and I was very much surprised to find out that monthly service fee is also waived if you are 62 YEARS OLD OR OLDER.
    The letter said Monthly Service Fee is waived if you satisfy ONE of the following.
    1. Qualifying Direct Deposit or
    2. Maintain $1,500 or more in account or
    3. First-listed owner on the account is age 62 or older.

    I called the number listed on the letter and the agent confirmed my birthday and said “yes” the fee is waved because of my age…

  22. Mark says:

    Hey Guys,

    I have 52K TYP through CitiGold checking and 50K TYP through Premier CC.

    I have to book a flight worth $1100. If I transfer Citigold points to Premier, they can be worth 1.25 cents. Citi issues 1099 if the redeemed Bank points are over $600.

    How can I avoid getting 1099? I need to downgrade Citigold to basic so they don’t keep charging me monthly fees? My understanding is once you transfer CitiGold points, they will expire in 60 days.

    • Chuck says:

      I’m a bit fuzzy on this, but from memory if you get more than $600 you’ll get a 1099. So either swallow the 1099 or redeem at 1 cent per point.

  23. Rebecca says:

    Good ideas here, and thanks for letting us know about them. I have a couple of questions.

    1. I don’t understand the purpose of keeping the account open for a month after downgrading it. Once it finishes downgrading, shouldn’t it be safe to close?
    2. Would making a quick ACH push into the account and then closing the account when the funds clear be a safe alternative to downgrading, in order to avoid the monthly fees?

    • Rebecca says:

      Sorry, ignore question 2. I realized the problem with it.

    • Chuck says:

      1) Not positive, but I think there might be a problem if you close before the next calendar month starts.

      2) Citigold isn’t fee-free with an ACH push, only Citi Basic is, so I don’t see how ACH would help.

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