After generating roughly 7 million frequent flyer miles, hotel points, and other travel related award points in the past several years, it happened – my first official bank shutdown.
How it happened was a bit strange and a bit of a mystery, although I think I have a good handle on how and why. Last week I made a payment on my Barclay Arrival Plus card to take my balance to zero. No big news there. But that same day, without notice or my consent, all three of my Barclays accounts were closed. I noticed the closure a few days later when I tried to pay off my Choice Privaleges hotel card and immediately after logging in, saw my credit line at zero then noticed the “this account has been closed” tagline above that. Shortly after, I checked my other cards and all were exactly the same; no credit line and closed.
The Beginning of the Middle of the End
The whole closure issue is odd. In the past couple of months I had traveled to Spain, Fiji and Australia. After returning to the US, I called Barclays asking if I could use my points for a group of travel charges like taxis, airline miscellaneous charges, and others that were all under $100. Usually a travel related charge must be over $100 in order for Arrival points to be used to pay. It took nearly 2 weeks for the case to go through, but just a few days before my accounts were shutdown, my case was approved and roughly $650 worth of travel charges were paid for with points. If I was such a poor customer for Barclays, why approve my case for so many charges below $100? In addition, on the same day of account closure, I had made a payment on my Arrival card taking it to a zero balance. So the timing of the closure seems odd.
The good news is that I don’t need Barclays. That might sound angry and emotional, but it’s not meant that way. I don’t bank with them, and they aren’t a local bank in my area either. In the shortish time (months to 2 years) that I’ve had my three Barclays cards I’ve managed to generate some nice rewards:
Lufthansa – 200,000+ miles
Choice Priveleges – 100,000+ points
Arrival Plus – 900,000+ points
The Arrival Plus card alone has allowed me to pay for flights, hotels, and great white shark cage diving in my recent trips overseas. Lufthansa is, well, Lufthansa (I was saving up the coveted first class ticket), and Choice Privileges has some nice hotels in Europe and a few here in the US that I could make use of. To go a step further, Choice Privelages is probably the most underrated hotel program in the travel rewards space right now.
I called Barclays immediately after seeing my accounts were closed and asked for an explanation. After over 30 minutes on the phone with a representative from the bank, no explanation for the sudden shutdown was given. I was told that a letter had been issued that would have more information, and that I needed to wait to receive that before I could attempt to reopen my accounts.
Just a few days later, three letters from Barlcays arrived, all saying the exact same thing but just having different card names in the text. In the middle of the letter the reason for closure was stated: History of account usage. Wow thank you, that’s so much more clear! I responded to the letters with a letter of my own, asking that my account be reinstated. After a week of not hearing from the bank about my letter, I called them to discuss the situation and was told that reinstatement wasn’t possible.
Fight the Power
Now that I knew my accounts were toast, I wanted to be compensated for my points that were accrued. The Lufthansa miles were fine and were in my airline frequent flyer account, as were my Choice hotel points. But my Barclay Arrival points were an issue. I asked about getting the points paid out at 1 cent a point, along with a 5% redemption bonus (that would have taken place if the points were redeemed for travel), and also the annual fee that was just charged (and paid for). I was told that the points could only be paid out at .5 cents per point, and that neither the annual fee nor the 5% bonus would be possible. I told the phone manager that it wasn’t a satisfactory deal and parted ways.
Fortunately I had read a few stories about others who had had their Barclays accounts shutdown. To get their points paid out properly, they all had to file a complaint with the Consumer Financial Protection Bureau (CFPB). Here is the website to get started with a CFPB.
Shockingly the complaint website and process was wonderfully simple and had space at the end where users could attach related files and documents. From other’s stories, I figured it would be a few to several days before Barclays made contact with me about the recorded complaint, but I received a call the very next day with good news: Barclays agreed to pay out my points at 1 cent per point and refund the Arrival Plus annual fee of $89. They didn’t agree to pay out a 5% redemption bonus on my points, but I didn’t count on that. All in all, Barclays agreed to send a check of around $3,000 back to me. Looking back, I couldn’t have done much better (roughly $140 worth of value) even if I had redeemed all those points for travel, so I was satisfied. By filing the CFPB and knowing what to expect for the payout, I saved $800+ in the account closure settlement.
Certainly I’m still disappointed that my accounts are closed and that I’ve severed a relationship with a bank that had current and future promise. Some of the major downsides about the shutdown are:
1) I can’t continue to earn Arrival or Choice Hotel points, Lufhansa miles. The Lufthansa miles I’m not passionate about, but I do find major value in the Choice and Arrival programs.
2) My accounts haven’t been open long thus having a detrimental impact on my credit report. I have a lot of accounts and in general, short term closures aren’t that big of a deal, but I try and avoid closing accounts before I have roughly a year of usage.
3) I can’t apply for any more Barclay rewards cards for the foreseeable future, probably at a least for 6 months. I had wanted to apply for the Barclay’s American Airlines 60k offer at the time my accounts were closed. That offer and others will have to be shelved for a bit while the storm blows over.
In the past week since receiving those letters I’ve spoken with many Barclays employees, from front line phone reps to managers to people in secret backroom monitoring accounts. Through it all, no specific reason had been given. I’m guessing that the reason my account came to be closed was the request for a series of travel related charges. That case gave Barclays the right to look at the charges, see my total points balance, and maybe dig further in to my account. I’m guessing they saw my substantial points balance and the amounts that have been spent on the card and said ‘no bueno’, turning the key and shutting everything down.
In the shortish time that I’ve had my Barclay’s accounts, I’ve made money from Barlcays rather than the reverse. When a bank says that it isn’t happy with “account usage”, in my case that means that they don’t like losing money. Is Barclays just a sore loser? I don’t think so, they are just late to the dance. My account and others like it should have been flagged along time ago. Hopefully down the line I’ll get the chance to earn some more rewards from Barclays, and maybe we can be friends again.