Should I Decrease My Citi Credit Limits?

My Citi Premier application last week was the first time Citi told me that even with moving credit from an existing card, my overall credit with them was at a level that a senior manager needed to approve the application. The application was approved several days later, $2,000 in new credit plus moving some from an existing card.

I have built up a Citi collection of little-used credit:

  • Prestige: $35,000
  • ThankYou Premier: $10,300 (new)
  • ThankYou Preferred 1: $10,000
  • ThankYou Preferred 2: $10,000
  • ThankYou Preferred 3: $10,000
  • Dividend 1: $18,000
  • Dividend 2: $10,000
  • Dividend 3: $5,000
  • AA Platinum: $10,700
  • AT&T Access: $12,500 (recent downgrade from AA Executive)

Total: $131,500

The conventional wisdom is to not give up credit unless to trade for a new account, however when hitting limits it may be savvy to proactively reduce. I have done this for Barclaycard (no success for new approvals) and BofA (mixed results).

I realize there are many factors such as utilization, income, etc so no two cases are alike. With that caveat, I am interested in hearing others’ experiences with Citi credit limits.

One recommendation I heard was to put cards at $5,000 each which is a common baseline for cards such as those that are Visa Signature so it doesn’t look too small or too large.

Should I reduce and to what levels per card?

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  • Looking forward to trading advice. Recently had Citi say the absolute max they could extend was $10,300 on Prestige due to existing credit among other accounts. They proactively asked if I wanted to move credit from an existing account to the new Prestige (I declined; $10K is plenty)…however, I’m sure it would be prudent to reduce some other accounts before yet another application.

  • Al

    your credit score can only be boosted by so much with a large credit line and there is no upside if you are the type to pay your credit card balances BEFORE statement generation. that said, i really dont see why you are carrying such large credit limits across so many cards. my vote: decrease everything to 5k except for 1 card for that emergency situation where you need to charge over 10k.

  • Dino

    RTC, I also downgraded my exec to the AT&T card. The 2x bonus online category seems to be hit or miss. I tried buying a $200 amex GC but ther’s no way for me to determine if it earned double points. The points summary doesnt seem to be detailed like UR points. Unless I’m missing something? I called them to ask but the agent had no clue either. What’s your experience been so far?

  • Dan

    I did that with Chase and I had trouble with them next time I applied for a card because the rep said I had too much credit with them even though I had previously canceled a card with a large credit limit and I was canceling a card and replacing it with a different one. When I pointed out that I had a larger limit previously and higher income currently the rep switched to complaining about my total revolving credit. I got the card in the end after a second call but it was a pain. So in the future I am not giving up credit. I’d rather transfer the credit line and then cancel the card. Banks seem to be tightening up. My vote is not to give up anything.

  • PedroNY

    Close all of these cards, and keep on churning, set up an 18 month schedule on cards that require it, and churn ones that do not every 33 days.

    Good luck,

    PedroNY

  • Mark

    Somewhat off-topic: I never have any problems with approvals except with Barclaycard. I have 2 US Air cards (now Aviator) that I don’t use often and only keep open for the 10K annual bonus. I had the LH card a couple years back and cancelled before the fee hit (I can’t recall if they would or wouldn’t let me downgrade). When calling the recon line for new cards they state that too many inquiries is the reason for declining (and my offer to move credit from my existing cards is also declined). Do you have any recommendations that could increase my chances of Barclaycard approval? Would putting more spend on my existing cards help?

  • mason

    i think it is wise to proactively reduce credit limits. why hold on to all that unused credit line when you can get rid of it and likely increase your chance for automatic approval?

  • Rapid Travel Chai

    @Dino – just got the AT&T card, not had a statement close. It is tough with Citi to see what is happening or not. With Hilton cards there always seem to be lots of errors. I try to monitor on my ThankYou cards when there are targeted/retention offers, since those round numbers are easier to calculate.

  • Rapid Travel Chai

    @PedroNY – I have yet to take the plunge in the PedroNY method, inertia perhaps, maybe resistance to a new approach, I like those lazy retention offers your encouragement has helped me collect, though those are dependent on MS that I do not like spending time. I straddle between some cards I do like to keep long-term, of Citi it would only be the Prestige, for Chase I like at least keeping IHG and a Freedom. Realistically, when I am ever going to max out the Dividen 5%s again and even if so, I could do better with more sign-up bonuses.

  • Rapid Travel Chai

    @Mark – with Barclaycard I have tried approach like reducing credit limits and it hasn’t helped, here’s my post on it, seems for us it is necessary to close all cards with them, have 6 months sincce prior app, and then go for an auto-approval. I am planning to cancel all mine once my last US Air renews next month to see if they will waive the fee and if get that spend $500 each of 3 months offer many cards get. After that will start over with them.

  • Rapid Travel Chai

    @PedroNY – one thing on the ThankYou accounts important for people to know, is if I recall correctly, even though points are pooled, they remain with each card and are pulled for redemptions time earned or some other formula, so closing one ThankYou I think forfeits that account’s points. I have been using my ThankYou point stash quite a bit though still at 150k+ and another 50k coming.

  • John

    I once had at least five or six Citi cards (each with 10-20k credit lines) and I am now down to two, and soon down to one. The attrition is due to annual fees and, in one case, Citi closed the account, a card that I had not used since downgrading an AA card. So, my question is, do you keep spend on all of those cards?

    Even in the case where I get the annual fee waived, there really isn’t any benefit to having two of the same card (as in the case of my AA cards). I don’t MS, so I can’t apply for new cards at will, but I am looking to pick up the Prestige or Premier.

  • John

    RTC, by the way, was there any sign-up bonus when you downgraded to the ATT Access card?

  • Lively

    Citi just closed 2 of my Hilton Honors cards without even asking me (and I wasn’t applying for any new cards). They said it due to inactivity. But I was shocked nonetheless.

  • Rapid Travel Chai

    @John – I only use the cards where there are targeted or rentention offers, last year my ThankYou Preferred’s got a lot of targeted spend offers, this year have not. The Dividend’s I keep ostensibly for the 5% quarter, this year’s categories don’t work for me and without easy MS for me, I probably should drop them.

    Downgrade to AT&T no bonus, I did it for the category bonuses and curious if would get targeted offers.