Wednesday, January 07, 2009

Citi's Credit-Limit Letter Arrives

Earlier this week I discussed Citibank's reduction of my small-biz credit-card limit from $20k to $3k. I mentoned that this limit-slicing move by Citi hardly matters to me — we rarely use the card for more than $200 in any given month, and that gets paid off as soon as I get the statement.

What was a little peeving about the reduction, though, was that I found out about it only by checking my account online.

In other words, Citi never sent me a letter to announce their actions. Although even someone as dense as me could see this coming, it would still be decent of Citibank (or any bank) to fire off a letter before undertaking a credit-limit reduction of, oh, say, 85 percent.

So guess what arrived today? Their "Responsible Lender" letter (PDF).

Gotta love how those guys frame it: "We're doing you a favor. By reducing your limit, we're increasing your security."


The suits at Citibank are doing what every other bank who made innumerable retarded lending decisions the last 5-7 years is doing:

They're shedding risk wherever they can.

(And cramming taxpayer dollars into the balance-sheet black holes left by billions of dollars' worth of deflating assets. But that's another story.)

Stuff like this sure makes me glad I'm not dependent on plastic for anything other than convenience.


— Posted by Michael @ 8:35 AM


You know I stopprd caring about the credit score, as I been debt free for about a year. But to drop your limit poses a problem if you do carry any ballence in that it reflects that your debt to credit ratio would spike. In otherwords you could be paying as agreed with good credit then They drop your limit and you now look as if your maxed out and a risk. They made thier bed so they should not mess with mine, if I am in compliance


Good thing.
Having no debt does sure makes me feel oh so good. :D
It's better to have hard cold cash than debts.


A few years back, Capital One increased my limit without me asking them to and now it has been reduced to lower than it was when I got it. Gotta love these idiots.


Finally! It will help us save more and cut back on our spending habit.

** Comments Closed on this Post **

Thoughts on my personal finances, goals, experiences, motivations, and accomplishments (or lack thereof).

My financial life began turning around when I took responsibility for it.
— Dave Ramsey


Start (2005-12): ~$21,900
Currently: $0
[About Our Debt Paydown]


Savings Goal: $15,000
Currently: ~$15,115
[About Our Liquid Savings Goal]