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Citi bank Double cash back mc denial letter second time.

longtimelurker
Mega Contributor

Re: Citi bank Double cash back mc denial letter second time.


@Throckmorton wrote:
... is already a very high limit for Citi and if its not being utilized, its just taking limits from someone else who would. Just myho.

I've heard this a few times now. Is there evidence that it is true? Specifically, do banks allocate a fixed amount of credit exposure across all their cards? I would have guessed they use statistical modeling to predict actual usage.


My understanding is that credit limits are outstanding liabilities for the issuer and as such the issuer has to have some fraction in reserves.  So the same amount of reserve could be used to reduce an unused CL and give it to others.

Message 11 of 21
CardNut
Valued Contributor

Re: Citi bank Double cash back mc denial letter second time.


@longtimelurker wrote:

@Throckmorton wrote:
... is already a very high limit for Citi and if its not being utilized, its just taking limits from someone else who would. Just myho.

I've heard this a few times now. Is there evidence that it is true? Specifically, do banks allocate a fixed amount of credit exposure across all their cards? I would have guessed they use statistical modeling to predict actual usage.


My understanding is that credit limits are outstanding liabilities for the issuer and as such the issuer has to have some fraction in reserves.  So the same amount of reserve could be used to reduce an unused CL and give it to others.


They do this similarly with direct loans on deposits. Should there be a run on withdrawals where everyone pulls their cash out, they could not satisfy all the requests due to the money being tied up in personal or commercial loans.

 

If everyone maxed out all pf their cards with that bank all of a sudden, they could not pay all the merchants. 

Scores, HPs/24 mos. (updated 01/13/21):
    Experian FICO Score 8 = 828, 1/24
    Experian FICO Score 9 = 813, 1/24
   TransUnion = 811, 1/24
    Equifax = 813, 0/24

Total 2020 rewards, incl. offers/deals = $1,388.00

Total CL: $247,000

Cards (hover over for CL | interest rate | Date Opened):
Message 12 of 21
Throckmorton
Regular Contributor

Re: Citi bank Double cash back mc denial letter second time.


@CardNut wrote:

@longtimelurker wrote:

@Throckmorton wrote:
... is already a very high limit for Citi and if its not being utilized, its just taking limits from someone else who would. Just myho.

I've heard this a few times now. Is there evidence that it is true? Specifically, do banks allocate a fixed amount of credit exposure across all their cards? I would have guessed they use statistical modeling to predict actual usage.


My understanding is that credit limits are outstanding liabilities for the issuer and as such the issuer has to have some fraction in reserves.  So the same amount of reserve could be used to reduce an unused CL and give it to others.


They do this similarly with direct loans on deposits. Should there be a run on withdrawals where everyone pulls their cash out, they could not satisfy all the requests due to the money being tied up in personal or commercial loans.

 

If everyone maxed out all pf their cards with that bank all of a sudden, they could not pay all the merchants. 


All of my credit card agreements state something along the lines of the issuer having sole discretion over whether to approve charges. In other words the credit limit itself wouldn't be an obligation on the part of the issuer.

 

I'm not suggesting you're wrong about banks allocating a portion of credit limits in reserve. I've just been curious about this.

Message 13 of 21
CardNut
Valued Contributor

Re: Citi bank Double cash back mc denial letter second time.


@Throckmorton wrote:

@CardNut wrote:

@longtimelurker wrote:

@Throckmorton wrote:
... is already a very high limit for Citi and if its not being utilized, its just taking limits from someone else who would. Just myho.

I've heard this a few times now. Is there evidence that it is true? Specifically, do banks allocate a fixed amount of credit exposure across all their cards? I would have guessed they use statistical modeling to predict actual usage.


My understanding is that credit limits are outstanding liabilities for the issuer and as such the issuer has to have some fraction in reserves.  So the same amount of reserve could be used to reduce an unused CL and give it to others.


They do this similarly with direct loans on deposits. Should there be a run on withdrawals where everyone pulls their cash out, they could not satisfy all the requests due to the money being tied up in personal or commercial loans.

 

If everyone maxed out all pf their cards with that bank all of a sudden, they could not pay all the merchants. 


All of my credit card agreements state something along the lines of the issuer having sole discretion over whether to approve charges. In other words the credit limit itself wouldn't be an obligation on the part of the issuer.

 

I'm not suggesting you're wrong about banks allocating a portion of credit limits in reserve. I've just been curious about this.


True, but they expect a certain % of cardholders to use most or all of their CL, some a portion, and some very little. 

 

I suppose they could deny transactions due to utilization being too high (not on an individual account) overall and reduce CLs (which they do in bad economic times) for this reason as well.

 

For instance, giving every single cardholder double the CL that they normally would give them, would cause a big issue for lending if utilization overall started to skyrocket. 

Scores, HPs/24 mos. (updated 01/13/21):
    Experian FICO Score 8 = 828, 1/24
    Experian FICO Score 9 = 813, 1/24
   TransUnion = 811, 1/24
    Equifax = 813, 0/24

Total 2020 rewards, incl. offers/deals = $1,388.00

Total CL: $247,000

Cards (hover over for CL | interest rate | Date Opened):
Message 14 of 21
Gmood1
Community Leader
Super Contributor

Re: Citi bank Double cash back mc denial letter second time.

@firefox100 

First of all, how long have you had the Citi DC? Do you have any other Citi backed cards?

Citi will at times allocate maximum limits on each CC. Saving exposure for other CCs that they offer, that you may want in the future.

Don't take the reason codes as gospel. Rarely for me are they spot on with the true reason for denial.

 

If you really want a CLI. Take a HP and let a UW(human) decide. The computer is just spitting out whatever it needs to, in order to keep their credit exposure down.

 

 

 

 

Message 15 of 21
randomguy1
Valued Contributor

Re: Citi bank Double cash back mc denial letter second time.

Statistical modeling is more prevalent these days due to Big Data analytics. 

Financial services, in particular, have widely adopted big data analytics and machine learning to inform better investment decisions with consistent returns.

Message 16 of 21
firefox100
Established Contributor

Re: Citi bank Double cash back mc denial letter second time.

 

Thank you do not need credit line increase from Citi bank that bad that I would take hard pull inquirie. Asking for another review or reconideration for credit increase is done by computer you most liklikely get the same answer why take the risk with hard pull. I am just giving out data points where one bank said no to an credit increase another bank Wells fargo gave  3K increase on the same day.

 

 Credit lines credit cards are not liabilitys a performing loans and lines of credit are assets on the books of bank. Demand accounts such as checking accounts and saving accounts are are liability to bank. Bank would live to have heavy use  of there lines of creditcards as long as the risk is low to none payment the bank makes money when there customers use there cards and pay intrest. Most banks can use the out standing balances as collateral and get overmight funding from the fed discount windo or the repo market.

Message 17 of 21
Gmood1
Community Leader
Super Contributor

Re: Citi bank Double cash back mc denial letter second time.

@firefox100 

You are mistaken about what you'll most likely get with a HP.

Took me a year to get my first SP increase on the Citi DC.

Don't remember the exact number but it was really small. I think it was $1000 or $1500.

Limit went up to $4000 or so.

I requested a HP CLI immediately after. Two hours later my limit was $20,000. 

After that, with SPs request it grew to a little over $30k. 

Inqs are temporary. I could have spent 10 years trying to grow it on SPs. Instead of 1 year. I'd say the 1 HP was well worth it.


 

Message 18 of 21
CreditCuriosity
Moderator

Re: Citi bank Double cash back mc denial letter second time.


@Gmood1 wrote:

@firefox100 

You are mistaken about what you'll most likely get with a HP.

Took me a year to get my first SP increase on the Citi DC.

Don't remember the exact number but it was really small. I think it was $1000 or $1500.

Limit went up to $4000 or so.

I requested a HP CLI immediately after. Two hours later my limit was $20,000. 

After that, with SPs request it grew to a little over $30k. 

Inqs are temporary. I could have spent 10 years trying to grow it on SPs. Instead of 1 year. I'd say the 1 HP was well worth it.


 


Bingo a HP isnt the end of the world.  It use to require a HP for most lenders to get a CLI.  Losing a few points for a CLI if you really want one isnt the end of the world otherwise i speculate your CL on Citi and Discover and other cards are ample for your spending needs.  I just see alot of posts form you complaining about either Discover or Citi lack of CLI's and you can't understand why they won't give you one.  Probably because they see your limits sufficent to spend and income is likely the answer.

Message 19 of 21
firefox100
Established Contributor

Re: Citi bank Double cash back mc denial letter second time.

 

The way things are I would not take chance, I have much better cards that I use much more then Citi Double cash back card. I am not going to do any hard pulls for next year stay in the garden. The next card I will go for is the Wells fargo visa signature card to go alone with my Propel card.

Message 20 of 21
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