Monday, January 05, 2009

Credit Limit Reductions: More Anecdotal

My wife and I keep two credit-card accounts for website, small-business use. Both cards are from Citibank. Both are in the business' LLC name.

Until December 2008, our primary-use small-biz card carried a $20k limit. Overkill, to be sure, as we use only a few hundred of it during any given month ... and usually not even that much.

With December's statement, though, I notice that Citibank has reduced the credit line by 85 percent, from $20k down to $3k.

I also note that Citibank, unlike Chase, never notified us of the impending reduction. Doesn't much matter to me, since our use of the card is so small. But for others, this could make for an especially nasty experience at the checkout.

Let's be honest, though: Anyone could see this coming. Note my previous posts regarding Citibank's difficulties and also impending credit-limit reductions.

Small-business owners, take note! If you rely on hefty limits on your credit cards to fulfill short-term borrowing needs, you might be in for some serious unpleasantness in the coming months.


— Posted by Michael @ 9:32 AM


Wow that is certainly a HUGE reduction.....and to not be notified with such a big amount. Maybe they will send you something later.


You know these darned companies, piss on em. Any that do that to me will never get my business again.

I only have one credit card right now, and it's with a bank that I have used for a long time, not to mention I have 3-4 times my credit limit in savings, so I can't see why they would lower it.

If I were you I would shred the card, cancel the account, and send a nasty note along with the shreded evidence to the CEO.

Anonymous Michael Sparks
, at 8:54 AM, January 06, 2009  

Ya know, if I needed that big ol' credit line, I might care. But I don't.

No need for shredded cards just yet, I don't think. But it's an idea whose time might have come for others!


Washington Mutual reduced my Home Equity Line of Credit from $123K down to $49,100. They did this in two steps. The first reduction was from $123K down to $90K and I received a letter in the mail advising me of the reduction. The second reduction from $90K down to $49,100 was a total surprise. One day I'm online looking at my account balances and notice that my available credit was rather low, so I looked at the credit limit and realized that WAMU had decreased my line for a second time and didn't bother to tell me about it.

I understand the reduction, but think customers are due appropriate notice.


It is actually illegal in most states for them to reduce your credit line without proper notification. Write a letter to the US Controller of the Currency. They will forward the formal complaint and the company (e.g. Citibank) HAS TO respond with an explanation and will likely reverse the action.

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