A business decision by Citibank has some experts scratching their heads. An unknown number of credit card accounts, co-branded with oil companies like Shell and Exxon-Mobil, have been closed by the creditor.

After filling up her gas tank, Shannon Burdette was confused when she was told her card had been rejected. AP reports that she called the customer service line on the back of the card, but was told her account was closed because of something that appeared on her credit report. The only negative statement on her report was the notice of closure by the creditor’s request.

ADVERTISEMENT

Citibank’s reason for taking action against customers is unknown. The bank’s spokesman declined to give an explanation for the massive closure, according to American Banking News. A statement issued by the bank pointed out that they “continuously evaluate their products.” Estimates for the number of account closures are in the hundreds.

A card being closed has the potential to damage a person’s credit rating. If a customer had a high credit limit on their closed account and a high balance in another line of credit, the “utilization ratio” drives the customer’s credit rating down, according to John Ulzheimer, president of educational services for Credit.com.

No law, including the recent Credit CARD Act, prohibits banks from closing credit accounts, even if no warning is given.

Citibank mailed out the closure letters only two days before the accounts were closed. Accounts affected include Mastercards co-branded with Shell, Exxon-Mobil, Citgo, and Phillips Conoco-66.

Citibank posted $8 billion in losses for its third quarter report last week. Like most banks, Citi expects defaults on credit cards to rise in the next few months. Before the announcement of account closures, analysts noted that the bank has “sharply reduced its outstanding credit to customers,” according to AP.