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Citi Raised My Credit Limit

This article was written by in Credit. 13 comments.


Last week, I received an official-looking notice in the mail. You know the type: the envelope requires you to tear the perforated edges in a specific order and contains security ink so the contents cannot be seen until opened. There is a return address on the envelope but no business name.

In my experience, the more the envelope looks official, the more likely it is to be junk mail. So I ignored the mail, as I often do, and left it in my incoming “file.” Yesterday, I went through the “file” to make sure I wasn’t missing anything important, and opened this particular envelope.

The notice informed me that Citi was kind enough to increase the credit limit on my primary credit card by a few thousand dollars. I have never approached my credit limit, so I wasn’t sure why they were suddently this generous.

A credit limit increase, if not used, is a good thing for two reasons.

If you spend the same amount with a higher credit limit, your credit utilization ratio decreases. A lower credit utilization ratio could have a positive effect on your credit score. A higher credit score can lead to all sorts of advantages, such as qualifying for a lower mortgage rate.

More credit is available to use in case of emergency. Using a credit card to help you through an emergency is rarely a good suggestion, but having credit available can be part of your overall emergency fund plan. If you need to pay a medical expenese immediately or rent a car in an emergency, credit cards can come in handy. A higher limit provides more flexibility. The goal is to pay as little interest as possible, so credit usage is healthier if you can pay off the balance every month.

Credit cards companies increase limits because they want people to spend more. In today’s economic climate, they don’t want everyone to spend more, only those who they deem to be low-risk consumers. I guess I am part of this group. People like me will help cover the risk the issuers take on by offering credit to more risky individuals.

Unfortunately for the credit card companies, this limit increase won’t encourage me to spend any more than I do currently.

Photo: JCKole

Updated July 28, 2014 and originally published September 22, 2008. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes, also known as Flexo, is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about him and follow Luke Landes on Twitter. View all articles by .

{ 13 comments… read them below or add one }

avatar Twiggers

How funny….we got the same thing. They increased our limit by about 6K though and really lowered the interest rate too. Nonetheless, the card has been cut up and won’t be used :-) But I love that it helped to lower my credit utilization as I am paying off the credit cards!

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avatar Juan

Citi also raised my limit recently by like 3-4k. I won’t be using it much though (even if balance transfers and purchases are still currently at 0%).

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avatar Andrew

Wow… Citi recently reduced my limit to $25.

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avatar Todd

They randomly increased mine as well about 3k. I like that just like you for the reasons you stated. Higher available unused credit typically means higher credit score. Also there if you had an emergency but that would be a very last resort. I always pay off my credit cards every month as well. I don’t use the citicard anymore however because I have opted to get the cash back from a combination of two chase freedom cards.

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avatar Get Out of Debt Guy

You are absolutely right, as long as you do avail yourself to the generous dollop of credit they gave you it can actually help your credit score. The danger is that I’m seeing creditors lower limits dramatically and instantly max cards out, really hurting the credit reports. Congratulations, I think.

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avatar Adam

American Express doubled my limit to $12,000. It’s funny how in these times of ‘tough credit’, they have the generosity to allow me to spend more money.

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avatar Simon

Here in Australia I yesterday received a note from my CC company offering a no hassles limit increase from $3K to $5K. No doubt this was triggered from the fact I just paid off the $3K owing in one hit with a work bonus. Curious they didn’t check their records to see I applied for my limit to be lowered from $5K about 12 months ago. I tore it up. The card is only used for emergencies or bill paying that requires a CC now so I’m actually thinking of lowering it even more.

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avatar Mr. ToughMoneyLove

“More money is available to use in case of emergency.” Don’t you mean more “credit” is available for use in case of emergency?

I know what you meant Flexo and I am not being critical of the points you are making. The point of my hypertechnicality is how easy it is for some folks (not you) to interchange “money” and “credit” in their conceptual thinking? I can’t even count how many times I have read about someone taking out a home equity loan to “get money to pay off debt.”

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avatar tom

they must be doing this across the board… my limit was increased by $500.

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avatar Tracy

Citibank raised my credit limit, but Bank of America, when I called to ask for an interest rate reduction, said they were “helping me out” by not lowering the interest rate, and by lowering credit limits on not only the account I was calling about, but also on another account. This is after they had indiscriminately RAISED my credit limits when I was making LESS money. I told the guy he was not being helpful, and that what he did was counterproductive.

Be very wary of asking for interest rate reductions at this point in time. I was not smart in timing it the way I did. I make a decent salary, and the guy even told me I’m a “very good customer” because I pay on time. Once I pay off my Bank of America accounts, I’m never charging on them again, unless I can pay it off immediately. The one account is a points card, so I won’t get rid of it, but I will close the others, I think.

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avatar Dolly

Recently Citi doubled my credit card limit (I didn’t ask for it and didn’t want it). I am betting, that Citi put “the money loaned to my credit card” on their books as a liability – that’sa how they used their bailout money. Instead of using the bailout money to make home loans – they are upping credit card limits – it affects the financials of the bank in the same way.
This is not a favor to you and me – it’s embarassing, we are getting money intended for other people – intended for another purpose – while Citibank gets to sit on all that money or use it for exec bonuses.
They are keeping the money and playing a ponzie scheme using the taxpayers bailout money. It’s a shell game – where’s the money? Can you find the money? We hid the money (in new cr4edit card balances) – but we’ll tell you anything you want to hear.

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avatar ImA60sRelic

Chase again raised my credit limit another $3,000 – AFTER I cashed another revolving credit check they provided to me at 0% (yes, zero percent) interest.

I love these zero interest loans and I don’t mind paying the 3% transaction fee.

Of course, I don’t use my Chase credit card for anything else, so I guess this is their way of saying, “Use me!”

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avatar tony

I WAS MAD AS HELL I PAID OFF 1800 DOLLARS OF A 2600 DOLLARS BALANCE OF CITI BECAUSE OF THE HIGH INTEREST RATE AND I WAS PLANNING ON TO USE THE CARD IF NEEDED IN THE FUTURE FOR A FEW MINOR NEEDED Medical AND DENTAL WORK. WHAT DID CITI BANK DO THEY LOWERED MY CREDIT LIMIT ALMOST 1800 DOLLARS . THERE REASONS WAS 1. I HAD ANOTHER ACCOUNT WITH ANOTHER CREDIT CARD THAT WAS IN DELIQUENT.2. I HAD BEEN LATE ON PAYMENTS. IT TURNED OUT BEFORE THE CALL WAS OVER SHE HAD GOTTEN ME CONFUSED WITH ANOTHER CUSTOMER IN BEING IN DELIQUENT WITH ANOTHER CREDIT CARD COMPANY. 2. I WAS LATE ONE TIME AND ANOTHER TIME BECAUSE OF BAD WEATHER THE MAIL DELAYED THE CREDIT CARD ARRIVIAL BY ONE DAY THEY STATED WE TOOK THE LATE PAYMENT FEE OFF BUT WE STILL CONSIDERED IN LATE NO MATTER WHAT THE SITUATION WAS.

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