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Accept credit limit increase offer (from Citi)? Pro: higher limit lower % usage Cons: Too much credit line open?

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Citi asks me: "We're thrilled to let you know that you're part of a select group invited to request a revolving credit limit increase1 on your Citi® Dividend Card. It's our way of showing you our appreciation for your continued loyalty.  -- 
Respond by 10/05/2017
 
 
  to get an instant response — with no effect on your credit score: "   Click Here


Question: For a normal (??) FWF member in excellent credit standing, isn't it always good to have credit limit increased so that utilized % is lower (even though not revolving) at any time?

Or is it bad since total limit increase means less willingness for others to extend more credit in the future (or can one never have too much so moot point) ?

Earlier I recall they used to auto increase limit, somehow asking me now....

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rated:
There's a point after which it may impact a credit card issuer to extend you credit offers. But empirically, it's pretty hard to reach that point. But if you plan on applying regularly for other Citi cards (say for signing bonuses), it may affect whether they extend credit as easily or not.

And it may also be entirely moot. If you are constantly at less than 5% credit utilization, a single credit limit increase won't affect your score much.

Personally, we have that card as well (only using it when there is a good 5% category). Credit limit on it is more than sufficient to keep utilization low even when we use it. But we're also churning some Citi cards as often as possible and with overall credit utilization in the 2-3% range usually, I would not bother to contact them to bump my credit limit (unless I was afraid they'd categorize that card as a dormant account soon).

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I would take it. Personally, my Dividend Rewards has only received that kind of offer twice in a decade. Over time, I was glad that I did. My CL went from mediocre to one of the top CLs in my card portfolio. Several years later, I made almost max out use of that card. If offered again, I would take it despite it is a card that I do no depend on as I used to.

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I would take it too. I've never seen any negative credit score impact from large available credit card limits, but usage ratio clearly has a big impact at individual account and somewhat on overall usage.

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JW10 said:   I would take it. Personally, my Dividend Rewards has only received that kind of offer twice in a decade.
  Eh I've done it ~10 times.  Usually they don't notify me.  But go through website to credit limit increase page for each card, and they may have the text indicating no inquiry.  I think the limit is once per six months (If it has that text), and of course eventually you hit citi's "max" total limit for you.

Mostly personal experiences but it seems like issuers usually used my highest previous reported card limit from any other issuer to set limit for a new card slightly higher (assuming i am not already near their aggregate limit for me).  So, there is benefit in raising limits on existing card(s).

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Bend3r said:     Eh I've done it ~10 times.  Usually they don't notify me.  But go through website to credit limit increase page for each card, and they may have the text indicating no inquiry.  I think the limit is once per six months (If it has that text), and of course eventually you hit citi's "max" total limit for you.
  
Thanks for the reminder. The last two times I did the no-inquiry increase on my DC they bumped it about $1k each time, just checked it again and they bumped it $7k which basically doubles the limit on that card.

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Bend3r said:   
JW10 said:   I would take it. Personally, my Dividend Rewards has only received that kind of offer twice in a decade.
  Eh I've done it ~10 times.  Usually they don't notify me.  But go through website to credit limit increase page for each card, and they may have the text indicating no inquiry.  I think the limit is once per six months (If it has that text), and of course eventually you hit citi's "max" total limit for you.

Mostly personal experiences but it seems like issuers usually used my highest previous reported card limit from any other issuer to set limit for a new card slightly higher (assuming i am not already near their aggregate limit for me).  So, there is benefit in raising limits on existing card(s).

  
The key difference is that the increase was offered by Citi WITHOUT a cardholder request.  They gave the cardholder the power to agree or not.

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The one on the website I referred to is the same, when that text shows up its auto approved unless you're under 6mo since the last one or at their total credit limit for you.

The op's quoted text is also not definite - it says invited to "request", not invited to "accept".

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invisible said:   For a normal (??) FWF member in excellent credit standing, isn't it always good to have credit limit increased so that utilized % is lower (even though not revolving) at any time?

Or is it bad since total limit increase means less willingness for others to extend more credit in the future (or can one never have too much so moot point) ?
Some of us reached an issuer-specific limit (some percentage of income), as confirmed by multiple others in another thread. Once you reach that limit, you may not get any more increases or automatic approvals for new cards from that issuer and will need to call recon and ask to reallocate existing lines to the new account. I've had to do this for years with Citi and Chase, so I don't do any CLIs on their cards.

I recall only one time I was denied a credit card because I had too much total available credit (and none from the denying bank), unfortunately I don't recall from which bank. My total available credit isn't anywhere near the multiple of my income that a few other FW members have, so maybe it was a picky bank, a bad time (credit crunch?), or maybe something else.

When I'm preparing for any kind of credit action that requires a clean report and the best score (like applying for cards, mortgage, or refinance), I pre-pay all my cards before the statement, so utilization on the report is (or close to) 0%. This also helps with DTI qualifications for mortgages if you happen to be close to the limits.

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As an example against the "What if I have too much credit, won't the issuers stop giving me more?" argument: I have over $1M in total CC credit limit. I just applied and was approved for new cards with Alliant, Barclays and a local credit union (self issuer -- not Elan). Instant approvals on all three. $10K to $15k credit lines granted -- not my biggest credit limits and not my smallest... I have a LOOOOOOONG history and one neg several years ago for a missed payment. Utilization was significant on a few of my cards -- around $50K spread over six cards.

OP -- Go for it! Back before 2007, this is how I got my $70K BOA credit limit -- one step at a time. More is better!

ETA:  I have definitely met the max credit limit for a few issuers -- Chase, WF (although I'm sure they would give me more now), several credit unions...  

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From OP:  Thanks all for your comments. I clicked in email, it made me login to citi, popped a box to fill in income, at the bottom saying no cred check etc, click next, it instant approved some small increase. Done. Then it did say if you want more increase fill in the amount below and go to next step with credit check etc or skip. I skipped of course. 

This specific card was at 13K limit, increased by measly $3K to $16K -- I realize this was not even 1% of limit so no effect likely. I was just curious on this first ever choice increase vs auto increases they used to have. This was probably triggered by a bunch of family airline ticket purchases totaling close to half the limit, all because Citi had 5% cashback for airline and Hilton

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Thanks OP. Did not know that Citi had this.

Did not get the email, but when I went online, all 3 cards I have had the option. 1.5k, 3k and 4K increases, after auto increases last December. Total of 27% increase over previous CL.

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debentureboy said:   As an example against the "What if I have too much credit, won't the issuers stop giving me more?" argument: I have over $1M in total CC credit limit. I just applied and was approved for new cards with Alliant, Barclays and a local credit union (self issuer -- not Elan). Instant approvals on all three. $10K to $15k credit lines granted -- not my biggest credit limits and not my smallest... I have a LOOOOOOONG history and one neg several years ago for a missed payment. Utilization was significant on a few of my cards -- around $50K spread over six cards.

OP -- Go for it! Back before 2007, this is how I got my $70K BOA credit limit -- one step at a time. More is better!

ETA:  I have definitely met the max credit limit for a few issuers -- Chase, WF (although I'm sure they would give me more now), several credit unions...  

What are the max limits, you've hit for Chase and WF?  

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jamesfatwallet said:   What are the max limits, you've hit for Chase and WF?  
  Both were utilization related, so I don't have any debt to income sort of limit information on either one.  

I maxed out WF at $25,000 over two cards (plus have $25K in PLOC and almost $100K in HELOC plus mortgage).  

Chase had both DW and me around $100K each spread over four/five  cards each.  This was all obtained prior to 2007.  Chase dropped me down to ~$60K when I really maxed out my utilization and my FICO dropped below 700.   

 

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In my experience, even if you've hit a specific issuer's "soft" limit for total credit, they will initially deny a new application but offer to reallocate credit from another card in order to open the one you applied for.
it has worked this way everytime for me.

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In these days of diminished opportunities for new card apps, I wouldn't worrry about limits. Let the bank tell you when you have too much credit.

Keeping your limits arbitrarily low was smart back when you wanted to blast through a ton of apps with reasonable certainty you'll get auto-approved.

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