I was recently approached by a person close to me about a turn down they had received from Citibank/Phillips Conoco for a MasterCard.  This person received a turn down letter from Phillips (CitiBank) along with a credit report from Equifax listing their credit score as 784.  After describing this person as having excellent credit the next sentence in the Equifax letter described their credit status as “RISKY.” 

The person is question has a seven-figure net worth, has never missed a payment on anything, let alone been late, held a company credit card for 58 years, retired as an executive from the from Phillips after decades of service, and owns his own home.  He is a member of a forum made up of similar folks who have been required to reapply for a new card because of the upcoming split of Conoco Phillips into two companies. AND he doesn’t NEED the credit card.

I have been told that people who pay off their credit card balances every month are termed poor candidates for a credit card because they pay off their balances every month and Citibank can’t make any money off of them.

As a consequence, thousands of people who are trying to be loyal to their company are denied a credit card they don’t really need.  BUT it is a slap in the face to them.  And word is traveling fast.

Can it be that a short sighted view of profitability will alienate so many people?  Is this another example of modern view of business based on “You can’t manage what you can’t measure” interfering with what can’t be measured?  After all, “What you should have gotten, but didn’t get” is also lost revenue, despite the fact it is difficult to quantify.

In my view, this short sighted view by Citibank WILL alienate thousands.  After they alienate many retirees and their familes, and turn down others who pay off their bills every month, they WILL be left with high profit interest accounts.  But the parent company will be out the proceeds of sales to those alienated by the bank they sublet their credit card business too.

Is the new version of “dead beat” to Citibank now those who pay their balance every month?

Please say it ain’t so, Joe!