What Affects Your Diamond Preferred Card Credit Limit?
-
Written by
Aja McClanahan
When you get a new credit card, your credit limit determines how much you can transfer to the card and even spend on the card.
If you’re interested in applying for the Citi® Diamond Preferred® Card, here’s what you need to know about getting the credit limit you want.
What is the Diamond Preferred Card Limit?
A credit limit is the maximum amount of credit a card issuer allows you to borrow on a credit card. It represents your card’s total spending capacity, which you can use for purchases, balance transfers or cash advances. Going over this limit could result in declined transactions or additional fees, depending on your issuer’s policy.
Citi does not publish the credit limit for its Diamond Preferred Card. This is because the limit is based on many factors, such as prevailing interest rates, your credit profile, income and more. When you apply for the card, Citi evaluates these factors to decide your initial limit.
However, responsible use and on-time payments can make it possible to earn a higher credit limit. Over time, Citi may reassess your account and offer automatic credit limit increases, or you can request an increase based on your financial situation.
Factors Affecting Your Diamond Preferred Card Limit
When you apply for a new credit card, the issuer looks at several things to determine if they will accept you and what your credit limit will be. These factors include:
1. Income
Your income and employment status are a big factor in your credit limit. People with higher incomes and stable employment histories are more likely to be approved for a higher credit limit.
2. Credit Score
Your credit score reflects your overall creditworthiness. A higher credit score indicates responsible borrowing habits, making lenders more likely to offer a higher credit limit.
A key part of your credit score is your utilization ratio, which measures how much of your available credit you have used. If you’re carrying debt on all of your credit cards up to the limit, you have a high utilization ratio. A card issuer may view a high ratio as a lending risk.
3. Credit History
Your credit history shows how consistently you’ve managed repayments over time, and a strong history of on-time payments can positively impact your credit score.
A low utilization ratio, which represents the percentage of available credit you’re using, also boosts your credit score, which could cause issuers to offer you a higher credit limit.
4. Account History
Some issuers might also consider your account history with them, such as how long you’ve been a customer and your payment history on existing accounts. Together, these factors help issuers make informed decisions about your creditworthiness and the appropriate credit limit to offer.
5. Federal Interest Rates
Another thing that could affect your credit limit is the prevailing interest rate. The fed funds rate, which eventually affects credit card issuer interest rates, can affect how much a card issuer wants to lend.
When interest rates are high, lenders may be more cautious and offer lower credit limits to reduce risk. On the flip side, during low interest rates, lenders might be more willing to extend higher credit limits due to reduced borrowing costs.
Is It Possible to Increase Your Diamond Preferred Card Credit Limit?
You don’t have to wait for the issuer to review your account and approve a limit increase. You can request a credit limit increase on your own by following these steps:
- Contact Citi’s customer service via phone, chat, or by sending a secure message through your credit card portal. You should be able to log into your Citi banking app or website to access these communication methods.
- Explain that you would like to request a credit increase.
- If necessary, verbally consent to a hard credit inquiry.
If you’re approved, you’ll receive your new credit limit information immediately via mail or in your secure messaging center.
Why Your Diamond Preferred Card Credit Limit Might Be Decreased
A reduction in your Diamond Preferred Card credit limit can occur for several reasons, such as:
- Missed payments
- High debt-to-income ratio
- Inactivity on your account
This decrease can negatively impact your credit score by increasing your credit utilization rate, which is the ratio of credit used to your overall credit limit.
To avoid a credit limit reduction, make payments on time, keep balances low relative to your credit limit, and use the card periodically to demonstrate activity. Additionally, regularly monitoring your credit report can help you identify and address potential issues that might lead to a decrease.
The Impact of Your Diamond Preferred Card Credit Limit on Your Credit Score
As mentioned, using less than your credit limit for your credit cards keeps your credit utilization low and can boost your credit score. Conversely, consistently approaching or exceeding your limit can harm your score by increasing your utilization rate. To maintain a good credit score, you should keep your Diamond Preferred Card balance as low as possible.
Diamond Preferred Card Credit Limit vs. Other Credit Cards
Though credit limits for some Citi cards can go upwards of $50,000, there’s no way to determine exactly how much you’ll receive once you apply for a Diamond Preferred Card.
The Diamond Preferred Card is not a rewards card, meaning it does not offer cashback, points or miles for purchases. However, it does come with one main draw: the ability to transfer high-interest debt to a low introductory APR. With this card, you’ll get 0% intro APR for 12 months on Purchases and 21 months on Balance Transfers then 16.99% - 27.74% (Variable) with no annual fee.
Plus, there are several benefits and protections as part of the Citi banking network. These include access to Citi Entertainment for exclusive event tickets, 24/7 customer service, and benefits like zero liability on unauthorized charges, free access to your FICO, Citi Flex Pay Plans, and fraud protection.
Tips for Managing Your Diamond Preferred Card Credit Limit
Here are tips that can help you keep your Diamond Preferred Card credit limit at a reasonable, manageable amount while also keeping your credit score strong:
- Set up account alerts to track spending and avoid exceeding your credit limit.
- Use Citi’s online tools or mobile app to monitor your account and credit usage.
- Check your balance regularly to stay on top of your finances and prevent overspending.
Frequently Asked Questions
What is the standard credit limit for the Diamond Preferred Card?
The Diamond Preferred Card credit limit varies based on creditworthiness, income, and other factors. The minimum is reportedly $500 but can go significantly higher for qualified applicants.
Can I request a higher credit limit after my first year?
Yes, you can request a higher credit limit at any time by contacting Citi or using your online account. Approval depends on factors like your payment history, credit score and income. A hard credit inquiry will likely be required.
How long does it take for a credit limit increase to be approved?
In many cases, you may be notified of approval or denial immediately. In other cases, it could take a few days or a week.
What happens if I exceed my credit limit?
If you exceed your credit limit, Citi may decline transactions until your balance is below the limit. Additionally, you could incur fees or get hits to your credit score for having a higher utilization ratio.
How does the Diamond Preferred Card’s credit limit compare to other premium cards?
The Diamond Preferred Card’s credit limit is competitive but tends to start lower than other premium cards. Higher limits are possible with strong creditworthiness and higher income.
