by Brittney Myers | Jan. 19, 2021
Even perfect credit can't bypass an issuer's application restrictions.
It's happened to a lot of us. You find a great credit card with a killer sign-up bonus, and you're ready to apply. Your credit is great, so you don't think twice -- then you get surprised by a rejection. What gives?
Credit card issuers deny applications for a number of reasons. While they're usually credit related -- a low credit score, high utilization, or even too short of a credit history -- even an excellent credit score isn't proof against issuer restrictions or limitations.
Citi, for example, is one of the many card issuers that will reject even the most creditworthy applicants for reasons that have little to do with credit scores. How often you apply for cards and how much credit you already have can impact your ability to get approved, too. Here are a few of the reasons you might be turned down for a new Citi card.
In the credit card rewards space, some folks practice what's known as churning, where they open many new cards just to earn the sign-up bonus. Once they have their bonus, the churner will cancel the card or sock-drawer it (put it away and never use it).
For obvious reasons, churning isn't very profitable for credit card issuers, so they've worked to limit the ability of churners to, well, churn. One popular method is limiting how frequently consumers can apply for and open new cards. Chase is perhaps the most notorious on this front with its well-known 5/24 rule that says you can't have opened more than five new accounts in the last 24 months.
Citi's rules aren't quite as broad as those set by Chase, and they restrict your applications rather than new accounts in general. Plus, Citi's limitations apply only to Citi card applications. In particular, you can only apply for one Citi credit card (personal or business) every eight days. And you can't apply for more than two Citi cards in any 65-day period. You'll also need to wait at least 90 days between business credit card applications.
It's not uncommon for issuers to limit the number of credit cards they'll offer you, but that's not the case with Citi -- mostly. While the bank doesn't cap how many cards you can have, they are known to cap how much total credit they'll give you.
The confusing thing here is that there's no blanket limit to how much credit a cardholder can receive. As with the credit limits on individual cards, the total amount of credit Citi will extend to you depends on both your credit profile and your income.
On the bright side, you may not be entirely out of luck if you're rejected for a new Citi card due to reaching your total credit limit. In some cases, you can call in and offer to move some of your existing credit limits to the new card. If you had a Citi Premier® Card with a $7,000 limit, for instance, you could ask for $2,000 of that to be transferred to the new card, giving your Citi Premier® Card a $5,000 limit and your new card a $2,000 limit.
As you might expect, limits on the number of applications you can make isn't Citi's only response to rewards churning. The issuer also has some fairly strict rules about how often you can earn sign-up bonuses with its rewards cards.
In most cases, you won't be able to earn a sign-up bonus for a given Citi credit card if you've received a bonus from that card -- or any card from the same family -- in the last 24 months. For example, say you earned the sign-up bonus for the Citi Prestige® Card in March of 2020. You'd need to wait until April of 2022 before you'd be eligible to earn a sign-up bonus with the related Citi Premier® Card.
But wait, there's more. Citi's sign-up bonus rule applies not only to opening cards -- it also applies to closing cards. So, if you opened your Citi Prestige® Card in March of 2020, then closed the card in September of the same year, the 24-month countdown restarts. This means you'd need to wait until October of 2022 to be eligible for another sign-up bonus.
With these restrictions, it's important to plan out which Citi bonuses you want to earn -- and when. The Citi Prestige® Card is a popular choice for its dining rewards and travel perks, but the Citi Premier® Card often has a larger sign-up bonus. If you're interested in both cards, you'll need to decide which you want now, and which you'll want in 24 months.
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