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Hi All,
I'd like to run my situation by you all and get feedback on the legitimacy of what the people at AT&T Universal Card are telling me about my new account with them. Several weeks ago I responded to an offer for an AT&T Universal Card to include balance transfers at 0% interest until April 2002. My intent was to transfer my existing debt of $11K on my Citibank Card, close that account and continue to pay off my debt. Upon speaking with AT&T Universal, they told me that they have a relationship with Citibank and , therefore, could not do a direct balance transfer. Instead, I had to accept an $11K check from them, deposit in my personal checking account and write a check to Citibank to cover the "transfer". So, yesterday, a check arrives from AT&T Universal for $11K. Along with the check came this letter:

"Thank you for choosing AT&T Universal Card! As promised, enclosed is a check made payable to you for the dollar amount you requested. Please deposit the check without delay, as the funds have already been billed to your AT&T Universal Card account. You can then use the money to make a major purchase or pay off other high rate credit card bills."

My question is this: How can they bill my credit card account when I haven't even cashed the check yet? In fact, I was considering not cashing the check and declining this offer due to a better offer (0% for one full year from another company). It's not like they sent me a money order or cash--they sent me a check which I've taken no action on. I called to ask about this and was told that since they've sent me a check they assume I'm going to cash it and can, therefore, bill my account. This sounds highly irregular to me. My own bank doesn't pre-cash checks and bill my account for those funds until the people I write checks to actually cash them.

The bottom line for me is that I'd like to take care of my debt in the most cost-efficient way possible. Prior to receiving the AT&T Universal check, I had filled out the offer for the 0%-1year card and sent it off figuring that I would just not cash the check from AT&T Universal. Now, when they do a credit check, it's going to look like I have two sources of $11K debt (AT&T and Citibank).

If, in fact, this is an irregular action on the part of AT&T Universal, can I report this to some sort of government or consumer protection agency? Or, should I just shut up and deal with it....I'm open to hearing your honest opinion. Thanks.
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Why not cash the check for 11K, even if just deposit into a money market account. If the opportunity is there to borrow at 0%, why not take it?
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Upon speaking with AT&T Universal, they told me that they have a relationship with Citibank and , therefore, could not do a direct balance transfer. Instead, I had to accept an $11K check from them, deposit in my personal checking account and write a check to Citibank to cover the "transfer". So, yesterday, a check arrives from AT&T Universal for $11K. Along with the check came this letter:

"Thank you for choosing AT&T Universal Card! As promised, enclosed is a check made payable to you for the dollar amount you requested. Please deposit the check without delay, as the funds have already been billed to your AT&T Universal Card account. You can then use the money to make a major purchase or pay off other high rate credit card bills."


As you requested, this is my "honest opinion".

First, yes, AT&T and Citibank have combined forces so that part of what they told you was true and most companies will not do a balance transfer from one of their accounts into another one of their accounts.

Second, did you actually activate the account yourself or was AT&T using this transaction to open it themselves? If the authorization to open did not come from you directly then that can be an arguing point to not even have the account show up on your credit report *if* the check they gave you was not a money order or cashiers check. If you do not deposit the check into your account, they should waive all fees associated with that check (I am assuming there is a fee for the cash advance?) as long as you return it to them immediately. I would also argue that the transaction should not appear on my credit report because the transaction was never completed.

The only argument they may make is that you approved the transaction when you spoke to them on the phone. However, I believe this *might* also fall into the rules of a loan that can be terminated within 3 business days. Call and inform them of your intention to return the check registered mail. Include a letter describing the dispute and closing the account. Send the check back to them unendorsed. They must credit the account within 7 business days.

This might work. I cannot make any promises on it though as I do not have any legal statutes to back it up. If you were hoping to wait and see if you get the other account approved first before returning the check, then that may be too late to "annul" this transaction. You can get out of it without having to pay anything but too late to prevent it from showing up on your credit report.

Good luck,
Ester
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If you're not happy with what you've got, call AT&T, let them know that it didn't work our as you had expected, ask them to cancel the check, and there should be no money owed.
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This is not fraud! This is how balance transfers work! If they had *not* debited your card immediately, before cutting the check, how would they be certain you would have sufficient line of credit once the check cleared?

- Kilbia
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Thisguy, thats exactly why they do it. You have a certain amount of time allowed to you to cash the check. If they don't show it on your account immediately, you can get a few 11,000 checks from a few credit cards and this might be a few too many based on what your credit deserves.

You can always call them back and get credit for the interest in the lapsing time period between sending and cashing the check, but you surely undestand why they are doing this.

Also its amazing they sent you the check at all noting the fact that AT&T and citi bank are NOT related, they ARE the same bank. They would openly tell you that.

My suggestion is as follows.

1. pay off citi bank.
2. close your citibank account.
3. over six months 0% interest on AT & T pay off as much as possible.
4. after 5 months, apply for the other card if available or similar.
5. open other card and transfere remainder of balance.
6. enjoy 1 year at 0% interest rate and pay off as much as you can.

This way you do the following:

1. You have 1 credit card open at any one time, 2 during overlapses.
2. You get 0% for 1.5 years instead of 1 yr or 1/2 year.
3. you allow 5 months for your citi bank card to show 'closed by customer' on all credit reports.
4. You pay off more of your debt and you are closer to being debt free.
5. You don't have 3 credit cards open with 11,000+ credit limit making you a credit risk.

Fool on,

Ned106
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<<Also its amazing they sent you the check at all noting the fact that AT&T and citi bank are NOT related, they ARE the same bank. >>

Not really. We haven't heard what they have charged as far as the fees go, and after six months he will still have a decent amount of debt in the Citibank family--not another card. Once again, the only one who loses is the debtor.

Not to mention, this transaction will probably put out a signal to all cards to raise his rates overall.

And one poster suggested to pocket the $11K in a money-market fund? I don't think what you get in short term interest (especially after taxes) is going to be even close to compensate the long term losses. That move would be, at best, a waste of time or, at worst, wreckless.

Ned's advice is good but . . .

<<4. after 5 months, apply for the other card if available or similar.>>

. . . that part is a big if. Somehow, I doubt that they let you do it.


Fred
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Buckzimmer,

I have both cards and I could not use the same password on my e-mail accounts. when I called to get clarification they told me they were the same company.

Also, last week, I negotiated my rates on both and lowered them during the same phone call to AT&T universal.

Thankyou,

Ned

AT&T": 800-423-4343.
CITI: 800-950-3114.

Call them and ask.
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Ned,

I guess I should have elaborated more on my last point. It's just that I have read so many posts from people that do BT's and such and found that when they do that too often, the offers tend to dry up and APR's go up. Especially, if you already have quite a bit in debt.

AT&T U. is the only card I have, and I just got their change in terms that state that they can basically raise your APR on ANYTHING that deem as a concern in your spending behavior.

Fred
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This sounds highly irregular to me. My own bank doesn't pre-cash checks and bill my account for those funds until the people I write checks to actually cash them.


I can see why you might feel a bit put-upon by this presumption on the part of AT&T Universal Card, but I think "fraud" is way too strong a word for this situation. After all, they're charging you 0% interest, so it's not like they're collecting any money from you for their actions -- assuming that they have imposed no fees for balance transfers or cash advances in this case.

Just my take,

Cheeze
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Finally catching up on post after being out of town all weekend!

If you no longer want the AT&T account, you could always cash the check, write AT&T a check for 11,000 then close the account after your check clears. That way, the account will no longer show open on your credit report when you apply for the other card.



Wendy
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Two words come to mind in this particular situation: Buyers Remorse

To use the word, "fraud," is quite a statement on this board, so when you do it, we all hope you'll back that up. (Not intended to start a flame)

For an $11,000 direct balance transfer check to be initiated by the payer, it must be authorized by the payee. That means you either called AT&T Universal, or they called you. Citibank does own the Universal Card portfolio, so transfers couldn't be made directly. At that point the direct check would have been offered, so it could be cashed into your bank account.

What does it mean when the credit card company confirms that they're sending $11,000 to your name, address, and procede in drilling off a countless list of disclosures? That means to me they're sending you a "live" check! Not a blank check, an actual pre-made check.

If you don't fully understand what a credit card company is doing, then ask more proactive questions.

That's my beef...try not to take this post the wrong way.

-Nuhgget
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I don't understand the concern. That is how a BT works. Period. It's a GREAT deal, not a fraud.

Citigroup (i.e. Citibank/AT&T Universal) is doing people a great favor by agreeing to send you the check in your name. Most banks don't provide this level of customer service; Citbank/AT&T Universal is the only one that I know who does this. Whenever I do a BT from Citibank I ALWAYS *ask* for them to cut me a check - since A) I don't always want another issuer to know I'm using a BT to pay them off and B) I'd rather be responsible for seeing my money deposited and making the payment (online) myself than depending on some clerk somewhere who sees thousands of these checks per day.

The reason the check is posted when it is cut, and not when it is returned to their bank is b/c they want to earn interest on it for as long as possible (all banks look for ways to earn extra money; that's part of being in business). But seeing that they are charging you ZERO percent interest on this particular offer, they aren't making any money on it at all.


I have no idea why you find this "fraud", when in actuality it is excellent customer service.


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Furthermore,

AT&T was nice enough to *suggest* sending you a direct BT check - even after you told them you wanted to pay off a Citibank account. How much more honest and "in your interest" could they be? They could have (and in the fashion of good business sense, should have) shut up about it and let you continue paying their parent company Citibank whatever high interest apr you are stuck at right now.








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Thank you all for your response. Re-thinking the title of my post, I should have used a different word. I included the question mark in order to probe the question of whether or not their method of billing my credit card prior to my cashing the check was appropriate. Perhaps, I should have said AT&T Irregularity? At any rate, you all gave me great input--both the positive and negative. Thank you.
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