Your credit's no good here

Some credit card holders with Egg accounts - Egg's an online bank recently bought by CitiGroup - got word the other day that their cards were being canceled.

Just who were these bad eggs getting their plastic shredded?

Not necessarily - as you might easily and naively imagine - those who are charging up a storm and neglecting to pay the bank what they owe them.

No, a lot of the folks getting humpty-dumptied by Citi are clean, sober, respectable, responsible credit card holders with the ridiculous tendency to pay off their balance every month.

Such rectitude! Such caution! Who'd want these sanctimonious and no doubt parsimonious bores as customers anyway? Fuss-budgets all, no doubt, with crocheted antimacassars on the armchair. Probably the type who use coasters to protect the coffee table and bring their shoes to the cobbler for new heels.

Well, I don't have an Egg account, but I do have a credit card or two with Citi, so I won't be surprised if I get a ding one of these days. I am, after all, one of those middle-aged, middle-class drudges who actually pays of her balance every month, too.

In fact, I just got a statement from one of my Citi cards notifying me that I have a credit of $244.84. It seems that last month when I did my online banking I plunked $244.84 into the wrong account. Oh, well, maybe the account I stiffed was also a Citi one. Maybe they'll like me a little more when they get to throw that 1/12th of 19.2% interest charge on my $244.84 and make a little dough off me. At least this should offset the disturbing fact that I have actually pre-paid for something. Why, that's almost as good as money in the bank! (Note to self: run out and find something worth spending $244.84 on. Use United Mileage Citi card. Upside: 244 more frequent flyer miles! My husband the frequent flyer savant will be so pleased and proud!)

If they can't make a bit of interest off us, the credit card providers are just going to look elsewhere. We just don't shift our own weight. Our credit's no good there.

Be bad! Be careless! Be profligate! Or be gone!

This new (?) practice of dumping the solvent was written up in The Sunday (UK) Times this weekend, and blogged in Global Economic Analysis, where it was seen by my eye-for-a-Pink-Slip-topic brother-in-law, Rick. From The Times article:

One industry insider said that as businesses credit card providers had a right to ditch customers who do not generate income. "In the last two years more and more customers have been paying off their credit card debt and that means less interest charges and other fees for the provider," the source said. "Maintaining a customers account costs money - it's hardly surprising that they want to lose some of those people."

MBNA, the credit card giant, recently introduced annual charges for those customers who very rarely use their accounts.

Egg denied it was targeting unprofitable customers, saying the cull spun from a review instigated by Citi when it bought the internet bank from the Prudential last May.

It said customers were chosen if their credit profile had deteriorated since they had joined Egg, and was mainly based on their relationship with Egg rather than taking into account if they had fallen behind with payments to other lenders or utilities.

Some of those who got the Dear John notes, however, beg to differ. They're pretty riled up about being so unfairly dumped. And who can blame them?

After all, it's the fact that rapacious credit card providers have been so eager to give anyone and everybody cards with mega-credit lines - only to have them go completely bust - that makes them have to rely on the rest of us to pick up the tab. Maybe if they weren't so damn eager to let some knuckleheads rack up 10 times their take-home in credit card debt, they wouldn't need us to let our payments lag so they can gouge us.

It seems, however, that things will get worse for us pecksniffs:

...credit checker Experian said better customers may be less welcome in future as banks chase profitable business to offset losses from delinquent borrowers with rising bad debts.

"Put yourself in their shoes. You spend very little and pay it off every month. You are not an ideal customer for them," said Peter Brooker, a spokesman for the company.

Well, I will put myself in their shoes, and I still come back to the fact that if they didn't have deadbeats defaulting on them all the time, they wouldn't need me to pay usury. And doesn't it seem that, with all the minute transaction-level info "they" have on all of us - Alert! Alert! Alert! Account holder Maureen Rogers just bought a $6.99 loaf of bread and a $6.99 pound of cherries at Whole Foods - plus all that credit history on everyone in the world - they can pretty much figure out who's most likely to default and, at minimum, not give them much of a draw? Or charge them the heftier initiation fee.

Must be hard for the credit card companies, walking that fine line between identifying those who will rev up a big load of debt, then struggle forever to pay it down at usurious rates, and those who'll rev up a big load of debt and walk away from it.

In any event, looks like those of us who are religious about paying off our credit card debt will have to resort to cash and debit cards in the future.

For the credit card companies, we just won't be worth the risk.