Other Credit Card Programs - Query - New AA Citibank Card impacts Credit Report

Hi,
I did a cursory search and didn't find anything...

I am looking to apply for the card.*

There were some postings on the Epinions.com website that receipt of a new AAdvantage Citi-card triggers adversely on the applicant's credit rating due to no floor limit on the citi-bank card. Is this really true?

There were some other reports of either difficulty or transaction disapproval when users attempted to use the card in foreign countries, is this really true?

Thanks much!
Jack

*Worldperks visa is going away and the two airline alternatives (Flexperks and American Express) are undesirable.

Credit card inquiries (and additional, new, credit cards) adversely affect credit. This is not specific to AA, AA's affiliated credit cards, or even flying. You may want to check any of the credit card forums here (as opposed to a mileage forum) or any external credit card sites for more information.

We have used AA Citi cards in a number of countries with no problems.

Cheers.

Hi,
I did a cursory search and didn't find anything...

I am looking to apply for the card.*

There were some postings on the Epinions.com website that receipt of a new AAdvantage Citi-card triggers adversely on the applicant's credit rating due to no floor limit on the citi-bank card. Is this really true?

There were some other reports of either difficulty or transaction disapproval when users attempted to use the card in foreign countries, is this really true?

Thanks much!
Jack

*Worldperks visa is going away and the two airline alternatives (Flexperks and American Express) are undesirable.

Is Citigroup still issuing credit cards?

It's a combination of the "no preset spending limit" showing 100% card usage and the mere fact that any new revolving credit account adversely affects your credit. Fatwallet folks estimate the hit to be in the single digits per new account, and it goes away with time.

I have heard what you speak of as well, but it is not limited to Citi cards. Any card that has "no spending limit" supposedly figures into your credit score as using 100% of the credit no matter the balance, since there is no defined ceiling, the ceiling is the current balance. Apparently it is solvable by running up a large balance once then that becomes the "high credit" and lower balances then properly reflect your non-utilization of the complete line. All this is anecdotal of course, I have no facts other than what I have learned here. An Amex charge card (Cent/Plat/Gold) has the same issue.

As to them being denial happy while using it, I can say from experience that I have had more trouble with them blocking it in the US than abroad. Particularly if you use it at a gas station.

It's hard to know the impact to your credit score because we don't know the specifics of your credit profile. Go here http://www.fatwallet.com/forums/finance/ and search for the Citi AA card and you will have a better idea (but no real answer) of what to expect from applying for additional credit.

For information about how applying for a new card (new credit,) such as CitiBank's AA affiliated products, might affect one's credit rating (e.g. FICO score,) take a look at www.myfico.com - in particular information from their credit education pages (http://www.myfico.com/CreditEducation/) - from the horse's mouth, as Fair Isaac Company is the originator of credit scores in the USA.

A salient graphic from there is this one,

http://www.myfico.com/images/CreditEducation/ce_scorebreakdown.png

from this page (http://www.myfico.com/crediteducation/WhatsInYourScore.aspx), entitled "What's in Your FICO Score."

Good image, JDiver. I've posted the numbers in other threads, but this is more compelling :)

So, for good credit scores,the 25% associated with "new credit" and "length of credit history" will be, probably noticeably, adversely affected by new credit cards and applications. For lower credit ratings, the other factors will weigh more and it probably won't be as visible in effect.

Cheers.

Hi,
I did a cursory search and didn't find anything...

If you didn't find anything, calling your search cursory is somewhat like calling a chihuahua "marginally smaller than a great dane". This is one of the more discussed topics on the AA forum.

If getting this credit card impacts your credit rating in any way that makes any noticable difference in your life, your credit was pretty marginal before.

The problems with transactions in a foreign country happen when somebody whose charge history with that card is totally or almost all domestic goes to a foreign country. This flags the account in the computer, and they put a hold on the card to see if it is stolen or being used fradulently. It can be straightened out with a phone call at the time from the foreign country, but it is easier to call before you leave. Give them the dates of travel and the countries you will visit, and you shouldn't have any problems.

I have heard what you speak of as well, but it is not limited to Citi cards. Any card that has "no spending limit" supposedly figures into your credit score as using 100% of the credit no matter the balance, since there is no defined ceiling, the ceiling is the current balance.

There is another very important point that should be made about Citi cards in relation to this: even if you have a clearly defined credit limit, Citi may choose not to report it, resulting in the same situation stated above.

I have 3 Citi cards: a Visa, a MC, and an Amex. Each one has a pre-set limit that has not changed since the card was issued. For some reason, Citi reports the limit on the Visa, but not the other two.

I have heard many others complain about this, but still have not heard a good reason for this policy. From my own experience, Chase, BoA, Discover and even the Amex cards with limits (Optima, etc.) all report their credit limits accurately to the credit bureaus.

Although this has not hurt my credit scores significantly, since I don't carry any balances, I can certainly see how it damaging could be if I did. Other than this issue, I have not had any major problems with Citi since I received my first card from them 11 years ago.

If getting this credit card impacts your credit rating in any way that makes any noticable difference in your life, your credit was pretty marginal before.



Quite the contrary. Things like new credit cards(inquiries, added credit and shorter overall credit length) affect good credit substantially more than marginal credit. If the credit score is already mediocre,the effects of this are minimal.If everything else is good, though, the impact of this is greater.

Cheers.

Looking at that pie-chart, does anyone understand what 'types of credit used' means? Does it mean VISA v. HELOC/MORTGAGE, or does it mean VISA vs. NORDSTROMS vs CHEVRON, etc., and if so, why?

The Citi AAdvantage card has been a weird experience for me. I'll get fraud alert on purchases <$50 but every now and then when I do a >$2,000 charge no fraud calls whatsoever.

Looking at that pie-chart, does anyone understand what 'types of credit used' means? Does it mean VISA v. HELOC/MORTGAGE, or does it mean VISA vs. NORDSTROMS vs CHEVRON, etc., and if so, why?

Types of credit refers to installment loans vs. revolving accounts. An even mix of utilized accounts results in a higher score, whereas more revolving accounts carrying balances will result in a lower score.

Generally speaking, installment loans that have been delinquent are a greater hit to your credit than revolving account delinquencies, and in general installment loans are considered "better" than revolving accounts.

I don't believe there is any differentiation between store cards (like Nordstrom's) and other revolving accounts.

Ummm.... is there a reason this thread isn't in the credit card forums?

The connection to Aadvantage seems to be tenuous at best...

Regards

Quite the contrary. Things like new credit cards(inquiries, added credit and shorter overall credit length) affect good credit substantially more than marginal credit. If the credit score is already mediocre,the effects of this are minimal.If everything else is good, though, the impact of this is greater.

Cheers.

While it may move the credit score of someone with good credit more than someone with mediocre credit, the impact of a movement of X points should be less for someone with good credit than for someone with mediocre credit. Notice we are talking here about getting (and keeping) one new credit card, something that is not unheard of in today's world.

While it may move the credit score of someone with good credit more than someone with mediocre credit, the impact of a movement of X points should be less for someone with good credit than for someone with mediocre credit. Notice we are talking here about getting (and keeping) one new credit card, something that is not unheard of in today's world.

I agree, in this particular case, and was just making a general point. Each card,and inquiry, as an impact. As to the other, the difference between a great score and a very good score can matter in some mortgage cases, and a few points can make a difference.

Cheers.

For information about how applying for a new card (new credit,) such as CitiBank's AA affiliated products, might affect one's credit rating (e.g. FICO score,) take a look at www.myfico.com - in particular information from their credit education pages (http://www.myfico.com/CreditEducation/) - from the horse's mouth, as Fair Isaac Company is the originator of credit scores in the USA.

A salient graphic from there is this one,

http://www.myfico.com/images/CreditEducation/ce_scorebreakdown.png

from this page (http://www.myfico.com/crediteducation/WhatsInYourScore.aspx), entitled "What's in Your FICO Score."

As a financial planner - I applaud the graphic and feedback. Well done!

Citi AA cards don't report a credit limit on your credit report because they don't have a preset spending limit. Like an Amex charge card, they allow you to exceed the revolving limit in a given month (as long as you pay the amount over the limit when the payment is due).

When your spend on the card reports on your credit report, the amount you owe is reported, as is a zero credit limit. To the casual observer, it looks as if you've increased your overall credit utilization percentage (because the amount you owe increased with your new card, but there is no corresponding increase on your available credit) This in theory has an impact on the 30% slice of the pie of the FICO score referenced above (higher credit utilization = Bad).

The jury is out on this. The experts at creditboards.com say that if your card does not report a credit limit, then the amount you owe on the card is not figured into your overall revolving utilization when your FICO score is calculated. No one but the people the the Fair Issac Corp know for sure, and they aren't talking.

This is not a new occurrence, and most "World" Mastercards and Visa Signature (Chase Mileage Plus, Us Airways Signature visa) cards have this issue.

I think there are other more important things to worry about that the impact of one card on your score. Pay your balance in full every month, and make your payments on time and you'll be fine.

For the second part of your question: Any airline credit card is a bad bet for use overseas because of the 3% fee the banks charge on each and every transaction. Capital One, and Schwab's Visa are two cards that do not change a foreign currency fee.

Citi AA cards don't report a credit limit on your credit report because they don't have a preset spending limit. Like an Amex charge card, they allow you to exceed the revolving limit in a given month (as long as you pay the amount over the limit when the payment is due).

As as blanket statement, this is not correct. As I posted earlier, I have 2 cards with Citi that have clear pre-set limits and neither of them report limits to any of the major credit bureaus. I have one Citi card that does report a limit.

This is not a singular occurrence. If you search creditboards.com or other credit card forums, you will find similar stories from other cardholders.

Which product reports?

My wife and I have 4 Citi "World Elite" Mastercard and Amex AA products, Plus a Citi Chairman card, none of them report limits, or largest past balance. They report balance and min payment, and that's about it.

I'm pretty comfortable with what I posted. People worry too much about Signature Visa/World Mastercard not reporting credit limits. It doesn't matter. Paying on time and not carrying a balance is what matters.

Ummm.... is there a reason this thread isn't in the credit card forums?

The connection to Aadvantage seems to be tenuous at best...

Regards

Quoting my own post, same question, different day; would be fascinated to know what this thread has to do with AAdvantage, miles earning, or flying, other than the fact that "AA" is in the thread title.

Regards

People worry too much about Signature Visa/World Mastercard not reporting credit limits. It doesn't matter. Paying on time and not carrying a balance is what matters.

I just wonder, though, if this could make the difference between, say 790 and 810 or so, a range one won't even hit without a great payment history to begin with.

Cheers.

Many thanks for taking time to reply, and especially for the links. The World Perks Visa card is in the toilet and the Flexperks replacement is a joke, as is the Big D's AX card; so I'll re-focus on AA and get the AA-Advantage Visa card.

For what it's worth, I've consistently paid my cc bills in full and never carried a balance; all I use em for is cash-cards for miles and Marriott points. So I probably shouldn't be concerned about the credit score.

I think that DL will run a bunch of NW customers off - I'm switching my travel priority to the Big-A.

Again, thanks very very much for such highly informative replies.

Cheers,
Jack

Which product reports?

My wife and I have 4 Citi "World Elite" Mastercard and Amex AA products, Plus a Citi Chairman card, none of them report limits, or largest past balance. They report balance and min payment, and that's about it.

I'm pretty comfortable with what I posted. People worry too much about Signature Visa/World Mastercard not reporting credit limits. It doesn't matter. Paying on time and not carrying a balance is what matters.

BoA MC, Discover, Chase Visa, and Amex Optima, are the non-Citi cards that I currently carry and they all report their respective credit limits accurately.

I agree that paying on time is more important than this issue. However, it could have a significant impact on someone who only had a couple of cards. Consider this example:

Let's say I charge 5K in one month to each of the two cards I have, a Discover, and my new Citi AA card:

Discover - Current Balance 5K, Limit 10K, Reported as 10K
Citi AA - Current Balance 5K, Limit 20K, Reported as 5K

My actual total utilization is 10/30K, or 33%.

Using the "high/limit" method for the Citi portion, my total utilization would be 10/15K or 66%. Or, if as you suggest, they throw out the Citi numbers because there is no limit reported, then the total utilization is now 5/10K, or 50%. (By the way, this theory makes no sense. Using this method, I could charge my Citi card to the 20K limit, and still have only a 50% utilization. Better yet, what if both cards have no limit? I have no utilization counted in the score?)

Clearly, the 66% and 50% are misrepresentations of my credit profile, and could have a major impact on my rating, particularly if I had a relatively short credit history.

Clearly, the 66% and 50% are misrepresentations of my credit profile, and could have a major impact on my rating, particularly if I had a relatively short credit history.

Or a credit history consisting almost entirely of these "no preset limit" cards. They seem to have become very popular in the last few years - I could see a newcomer encountering only these for the interesting cards.

I just wonder, though, if this could make the difference between, say 790 and 810 or so, a range one won't even hit without a great payment history to begin with.

Cheers.

According to American Express, anything over 720 is considered "super prime".

BoA MC, Discover, Chase Visa, and Amex Optima, are the non-Citi cards that I currently carry and they all report their respective credit limits accurately.

I agree that paying on time is more important than this issue. However, it could have a significant impact on someone who only had a couple of cards. Consider this example:

Let's say I charge 5K in one month to each of the two cards I have, a Discover, and my new Citi AA card:

Discover - Current Balance 5K, Limit 10K, Reported as 10K
Citi AA - Current Balance 5K, Limit 20K, Reported as 5K

My actual total utilization is 10/30K, or 33%.

Using the "high/limit" method for the Citi portion, my total utilization would be 10/15K or 66%. Or, if as you suggest, they throw out the Citi numbers because there is no limit reported, then the total utilization is now 5/10K, or 50%. (By the way, this theory makes no sense. Using this method, I could charge my Citi card to the 20K limit, and still have only a 50% utilization. Better yet, what if both cards have no limit? I have no utilization counted in the score?)

Clearly, the 66% and 50% are misrepresentations of my credit profile, and could have a major impact on my rating, particularly if I had a relatively short credit history.

If your card doesn't report a credit limit, the balance and the lack of credit limit are not included in the revolving utilization calculation. Some of the credit monitoring services break some of these cards out in a separate section ("revolving" vs "open" account types).

So yes, if you have a 'thin file', a signature card or world card is not going to help your score very much.

But, people with 'thin files' typically do not qualify for no preset limit cards.

Quoting my own post, same question, different day; would be fascinated to know what this thread has to do with AAdvantage, miles earning, or flying, other than the fact that "AA" is in the thread title.

Regards

As airlines continue to consolidate, Citi AA cards are one of the mileage earnings cards left. Chase (UA MP), Barclays (US Air/Frontier) also do not report a limit. Amex's Skymiles cards do.

According to American Express, anything over 720 is considered "super prime".

Just as an example, with the mortgage we currently have, anything that low would have resulted in a higher rate. We got a very good rate at the time, considering the loan amount, and 720 wouldn't have been near close enough. For situations like that, the "super duper prime" considerations matter :)

Cheers.

There are a bunch of different FICO models and FICO scores. There are FICO models dedicated to Credit Cards, Mortgage, Auto loans. For the consumer score (as reported by myFICO.com, anything over 720 is great, anything over 760 is awesome.

Trust me, a 720 consumer score will get you the best mortgage rate going.

Trust me, a 720 consumer score will get you the best mortgage rate going.

Trust me, this would not have worked for the mortgage we got three years ago, when rates were considerably higher. It's so low that, even with the recently record low rates, no lender I talked to could come close to the rate for this loan amount, no matter what our credit score.

This required credit closer to the 800 range. You don't really have to believe me, but we've got the loan and I know the details that were required to get the loan, and 720 wouldn't have cut it :)

Cheers.

I refied 8 months ago. My score is above 700 but below 760. Got a 5% 15 year loan, and a 2.25% HELOC. Lowest "prime" rate offered by my (national) credit union.

Very few people in the US have a score approaching 800, unless retired. I spend as much time on Creditboards.com as I do here. There are people there that are as crazy about credit as we are about FF programs. 760 is coveted, 800 is RARE.

Amex, as illustrated in this report (page 14) (http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NjI4MHxDaGlsZElEPS0 xfFR5cGU9Mw==&t=1) considers anything over 720 "super prime".

I refied 8 months ago. My score is above 700 but below 760. Got a 5% 15 year loan, and a 2.25% HELOC.

We got a 5.375% Jumbo 30 year fixed in 2005 when rates were considerably higher than they are now. Can't even get close now.

Cheers.

We got a 5.375% Jumbo 30 year fixed in 2005 when rates were considerably higher than they are now. Can't even get close now.

Cheers.

Can't speak to jumbos, but can guarantee you that if you walk into a bank or CU for a conventional loan with a consumer score above 720, you're walking out with their best rate. A year ago it was 680. Its 700/720 now.

Can't speak to jumbos, but can guarantee you that if you walk into a bank or CU for a conventional loan with a consumer score above 720, you're walking out with their best rate. A year ago it was 680. Its 700/720 now.

And I'm in the Bay Area, so I can't speak to conforming :) Perhaps the rules are different. All I know is jumbo...and big jumbo :)

What you say may well be true now since they don't even get to credit scores when I tell them the current rate. They just say "impossible." In any event, it wasn't the case for jumbos in 2005 when the housing market here was at a fevered peak.

Cheers.

Besides, higher scores should not be that hard to get, provided that one has:

Reasonably long-term credit history
Never, ever had a late payment on anything, not even one
Had paid every credit card bill in full on every card, every month
Has paid every loan payment (mortgage, car, etc.) in full on time with no
misses.

Cheers.

Its a flawed model that needs, somehow, to include income, and liquid assets. You could choose to keep a loan of 100K at 3% and choose to keep your money in the bank, but FICO would just see 100K in evil debt.

Other things that impact your score:

New cards drag your "Average age of your accounts" down. New cards also impact your score "you last opened a account 2 months ago".

Any revolving balance impacts your score. I regularly run 6-8K a month through my cards. My Starwood Amex always looks like it has a balance, even though I pay it in full every month.

There are other dumb reasons.

I had my retired MIL run herself through myfico.com. Her report shows a paid mortgage, a paid auto loan, a dozen or so cards, no balances. Her score was an 802.

New cards drag your "Average age of your accounts" down. New cards also impact your score "you last opened a account 2 months ago".

Any revolving balance impacts your score. I regularly run 6-8K a month through my cards. My Starwood Amex always looks like it has a balance, even though I pay it in full every month.



The latter is a big one. It depends upon when you have the report done.What point in your cycle. That is very flawed, as you say. Outstanding balance is not a negative reflection if it is paid down, but it lowers the score while it's there.

The new card thing has gotten me a bit as I have some newer accounts now. Also, additional bank accounts to take advantage of different rates. Why should another account (with money in it) be a negative? Yet it is.

Very good points.

Cheers.

The latter is a big one. It depends upon when you have the report done.What point in your cycle. That is very flawed, as you say. Outstanding balance is not a negative reflection if it is paid down, but it lowers the score while it's there.

Amex reports 60 days behind. I pay the bill when it is due (taking full advantage of the float). It always shows a balance. The only way to get to zero would be to stop using it for a month. Same occurs with the with my Citi AA cards, you have to stop using them to get to zero.

Again, I've got my mortgage and I am safely above 720, so I don't really spend a lot of time worrying about it.

If your card doesn't report a credit limit, the balance and the lack of credit limit are not included in the revolving utilization calculation. Some of the credit monitoring services break some of these cards out in a separate section ("revolving" vs "open" account types).


This is true and further illustrates the problem. I have an Amex Gold Card with no pre-set limit. This card is listed as "open" on all of my credit reports. The credit limit is shown using the "high/limit" method.

Both of the Citi cards in question, with pre-set limits, are listed as "revolving", and the "high/limit" method is used. Therefore, these cards are counted in the "revolving" utilization calculation, adversely affecting my score.

I suggest you take a look at your credit report to see if your cards are shown the same way. I doubt they singled me out for this treatment.

This thread began as a CitiBank AAdvantage query and would ultimately have been moved to the Other Credit Card Programs Forum, allowing for some discussion on the originating American AAdvantage Forum prior to making the move. Given the broadening and general credit card coverage of this discussion, that time has come.

Thanks for your participation - please continue the discussion on the thread in its new home.

/Moderator

I just wonder, though, if this could make the difference between, say 790 and 810 or so, a range one won't even hit without a great payment history to begin with.

Cheers.

In my case my fico score was 756 before getting 2 citi mastecards.After they showed up the next month my score was 724.But I doubt if it would hurt me in the long run.