@MarkintheHV wrote:
@Crowhelm wrote:
@lgtwriter wrote:I was approved for a Citi Costco card in August and they gave me a very small credit limit, $1,200 which was way way less than all of my other credit cards. I tried for a cli a couple of times, but decided to close the card because it was not very useful to me with that cl.
The same day or next day (I can't remember exactly) I applied for the Citi Simplicity card and was given a $14,600 credit line. Same datapoints. I had paid off a bit of utilization in the several months since I opened the Costco card, but there was no way that there were any changes in my profile to cause a difference of over ten times the credit limit.
Citi is weird, at least in my situation. YMMV of course.
All big banks are like that. If they start you off low even though you have great credit scores you are better off closing the account. Two very important things are communicated that way. You are not desperate for their card and most important you are not willing to play by their rules if the rewards don't outweigh their ridiculous limits. Can't wait to have my wife close the Freedom Flex card right after we cash in her latest points. $1600 limit with a 784 score pulled and 6 digit income is nothing but insulting and we won't stand for it.
I feel the same way, if they insult me with a ridiculous CL, I will close it. A low CL card will never get used by me because I will not let a card go above 10% utilization, and a $3k card (think Discover) would only get $300 and that is too much headache to deal with.
Bingo! And if more people would respond like this those issuers would think twice about doing it. I get that things need to be automated to a degree and algorithms can mess up, but we brought it to Chase's attention and they still didn't do anything but waste time and tried to do another hard pull with no guarantees. Unacceptable.
@Crowhelm wrote:
@MarkintheHV wrote:
@Crowhelm wrote:
@lgtwriter wrote:... Citi Costco ... gave me a very small credit limit, $1,200 which was way way less than all of my other credit cards. I tried for a cli a couple of times, but decided to close the card because it was not very useful to me with that cl.
Citi is weird, at least in my situation. YMMV of course.
All big banks are like that. If they start you off low even though you have great credit scores you are better off closing the account. Two very important things are communicated that way ...
I feel the same way, if they insult me with a ridiculous CL, I will close it. A low CL card will never get used by me ...
Bingo! And if more people would respond like this those issuers would think twice about doing it. I get that things need to be automated to a degree and algorithms can mess up, but we brought it to Chase's attention and they still didn't do anything but waste time and tried to do another hard pull with no guarantees. Unacceptable.
I get where you guys are coming from, but ultimately it just doesn't matter to them. I don't think the large lenders really care when someone closes a card with a low-limit approval. They don't rush out and change their underwriting standards. For whatever reason, that was how much they were willing to lend under the circumstances. Underwriting is underwriting and they all have their criteria. Even griping to a customer service representative probably doesn't get passed along to anyone who makes those decisions.
The algorithm is probably not messed up; it just reacted to some unknown factor that affected the outcome. The only difference is that with large national lenders instead of a small lender doing a manual review, you may not even know what caused it. For example, with AOD FCU, we had a number of people get turned down or low SLs, but we also learned that they were sensitive to student loan debt and they are conservative in how they calculate income, especially for those with irregular or self-employment incomes. Customer service reps with the large national lenders aren't privy to how their algorithms work, so they don't appear to be very helpful. But having those systems is important for them due to their size.
Now have I done the same thing? Yes. I had a $50K limit on one Discover card and applied for a new second card. I got a $1K limit. 
Yes, I felt "insulted" and quite surprised at the time too, but it's just business. Yes, I closed it pretty quickly, but it wasn't to "send a message" since I knew that was futile. It was just because even though I knew it might grow with some effort, I just didn't want to bother with it. There's no need to take it personal.
I suppose the alternative would be to give you the hard pull and then deny in lieu of a low limit. But would you really prefer that? At least a low limit approval has the opportunity to grow in many cases, if you're willing to try. In another example, I got an out-of-character low $1K approval on a Capital One Platinum card. Since I wanted it for a BT offer, it was basically worthless. I was in the conundrum of "it won't grow if you don't use it but I refuse to use it since it's low." I sock drawered it but later product-changed it to a Quicksilver when 1.5% Cash Back was cutting-edge before 2% cards became common. It was a daily driver and I grew it to the current $26K limit where it sits today. YMMV.
@Aim_High wrote:
@Crowhelm wrote:
@MarkintheHV wrote:
@Crowhelm wrote:
@lgtwriter wrote:... Citi Costco ... gave me a very small credit limit, $1,200 which was way way less than all of my other credit cards. I tried for a cli a couple of times, but decided to close the card because it was not very useful to me with that cl.
Citi is weird, at least in my situation. YMMV of course.
All big banks are like that. If they start you off low even though you have great credit scores you are better off closing the account. Two very important things are communicated that way ...
I feel the same way, if they insult me with a ridiculous CL, I will close it. A low CL card will never get used by me ...
Bingo! And if more people would respond like this those issuers would think twice about doing it. I get that things need to be automated to a degree and algorithms can mess up, but we brought it to Chase's attention and they still didn't do anything but waste time and tried to do another hard pull with no guarantees. Unacceptable.
I get where you guys are coming from, but ultimately it just doesn't matter to them. I don't think the large lenders really care when someone closes a card with a low-limit approval.
Oh you are 100% correct. And that is because most people think the bank or credit union is doing them such a great favor for just giving them a credit card. The fact is, that unlike you use credit cards like most on this website do, banks make huge profits off credit cards and if you have the income and credit you would be dumb not to demand a good credit line. $1600 is a no or bad credit CL, not a 784 Fico score CL.
They don't rush out and change their underwriting standards. For whatever reason, that was how much they were willing to lend under the circumstances.
If tens of thousands of low CL approvals would end this way, you can bet your last dollar they would be having emergency meetings about what to do about that.
Underwriting is underwriting and they all have their criteria. Even griping to a customer service representative probably doesn't get passed along to anyone who makes those decisions.
The algorithm is probably not messed up; it just reacted to some unknown factor that affected the outcome. The only difference is that with large national lenders instead of a small lender doing a manual review, you may not even know what caused it. For example, with AOD FCU, we had a number of people get turned down or low SLs, but we also learned that they were sensitive to student loan debt and they are conservative in how they calculate income, especially for those with irregular or self-employment incomes. Customer service reps with the large national lenders aren't privy to how their algorithms work, so they don't appear to be very helpful. But having those systems is important for them due to their size.
Now have I done the same thing? Yes. I had a $50K limit on one Discover card and applied for a new second card. I got a $1K limit.
I always disagreed with that statement if you judge me based on what other people did with similar income and/or fico scores. That is what I loved about AOD, manual underwriting. They took the time to look at our can't be much better record over the last 10 years and said yes, we want these people as customers. We got 100% what we asked for and based on the ease of approval probably left money on the table, but 15k is all we need.
I suppose the alternative would be to give you the hard pull and then deny in lieu of a low limit. But would you really prefer that?
And this is the main reason they get away with what they are doing to good people. Most will say, oh well, that CL stinks but I got the hard pull now so might as well keep the card. What should be made the law is a denial is a hardpull, an approval needs to be approved by the applicant first before it is a hardpull otherwise it is a soft pull with no consequences. Or, force 100% disclosure how they determine CLs. If my wife and I had that info she most likely never would have applied. That is of course assuming there is really a good reason. I more and more suspect it is like a lottery and you just have a much higher chance to get a good CL with a higher Fico score and income but if you are unlucky you can still get the shaft.
At least a low limit approval has the opportunity to grow in many cases, if you're willing to try. In another example, I got an out-of-character low $1K approval on a Capital One Platinum card. Since I wanted it for a BT offer, it was basically worthless. I was in the conundrum of "it won't grow if you don't use it but I refuse to use it since it's low." I sock drawered it but later product-changed it to a Quicksilver when 1.5% Cash Back was cutting-edge before 2% cards became common. It was a daily driver and I grew it to the current $26K limit where it sits today. YMMV.
