I have credit cards with very high credit limits. I use them for purchases like cars, and other big ticket items. These purchases tend to be infrequent, for obvious reasons. The other day, I received a notice from Citigroup informing me that since I was not using my entire credit limit, the limit would be decreased. I have never had a late payment. My credit score is above excellent.
By reducing my limit, Citigroup is telling me it wants me to do less business with them.
This is exactly the kind of brilliant banking which contributed to Citigroup losing $28 billion in 2008.
Monday, March 15, 2010
One Hundred One: Stupid Bankers
Today I went to my local commnity bank (Barrington Bank & Trust, an operating unity of Wintrust Financial, a Nasdaq company), to talk about a mortgage loan for my son. There is no way my son would qualify for a mortgage on his own, so I offered the young man at the bank a deal. I said, "How about if I deposit an amount in a CD equal to the amount you loan my son. The CD would be kept by the bank as security for the loan." The young banker (Dennis, I think), proceeded to give me a lecture on "loan-to-value" Fannie, Freddie, and FHA. Had young Dennis bothered to ask a few questions about me, he would have easily found out that I knew as much or more about mortgage banking as he did. Unfortuantely for him (and his employer), he assumed he was possessed of all mortgage banking knowledge known to man, and that I was an idiot. Actually, he seemed pretty typical of most bankers I meet these days.
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