Earlier this week I discussed Citibank's reduction of my small-biz credit-card limit from $20k to $3k. I mentoned that this limit-slicing move by Citi hardly matters to me — we rarely use the card for more than $200 in any given month, and that gets paid off as soon as I get the statement.

What was a little peeving about the reduction, though, was that I found out about it only by checking my account online.

In other words, Citi never sent me a letter to announce their actions. Although even someone as dense as me could see this coming, it would still be decent of Citibank (or any bank) to fire off a letter before undertaking a credit-limit reduction of, oh, say, 85 percent.

So guess what arrived today? Their "Responsible Lender" letter (PDF).

Gotta love how those guys frame it: "We're doing you a favor. By reducing your limit, we're increasing your security."

Whatever.

The suits at Citibank are doing what every other bank who made innumerable retarded lending decisions the last 5-7 years is doing:

They're shedding risk wherever they can.

(And cramming taxpayer dollars into the balance-sheet black holes left by billions of dollars' worth of deflating assets. But that's another story.)

Stuff like this sure makes me glad I'm not dependent on plastic for anything other than convenience.

Labels: Credit Cards