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    • PCN_advice_needed
    • By PCN_advice_needed 7th Oct 17, 2:23 PM
    • 16Posts
    • 6Thanks
    PCN_advice_needed
    Halifax Clarity - credit limit lowered from £5000 to £500
    • #1
    • 7th Oct 17, 2:23 PM
    Halifax Clarity - credit limit lowered from £5000 to £500 7th Oct 17 at 2:23 PM
    I've had a Clarity credit card for some years, and I was surprised to see that my credit limit had been lowered by them from £5000 to £500 a few weeks ago. I use the card when abroad for cash withdrawals and paying for things as there's no transaction charges. There was a small balance on it but I paid that off pretty sharpish.

    On calling them, I couldn't get a clear answer - the person I spoke to put me on hold and spoke to the Lending department (apparently) who said it wasn't a change in my credit score with them, but it might have been something else.

    Having registered with Equifax and a couple of others to get free credit score reports they all look healthy and I'm at a loss to understand how to get the credit limit raised again - my financial circumstances and spending haven't changed radically and it's a pain because if I'm abroad for work I can rack up £1500 - £2000 in expenses pretty quickly.

    What's the best approach to finding out what data Halifax based their decision on, and if I need to what's the best way to follow the chain back to the original organisation which collected that data ?
Page 1
    • zx81
    • By zx81 7th Oct 17, 2:26 PM
    • 13,622 Posts
    • 14,073 Thanks
    zx81
    • #2
    • 7th Oct 17, 2:26 PM
    • #2
    • 7th Oct 17, 2:26 PM
    What's the best approach to finding out what data Halifax based their decision on
    Originally posted by PCN_advice_needed
    There isn't one. It's confidential and they won't share it with you.

    They may simply be reducing credit liability across the board. What sort of balance did you typically have?
    • PCN_advice_needed
    • By PCN_advice_needed 7th Oct 17, 5:25 PM
    • 16 Posts
    • 6 Thanks
    PCN_advice_needed
    • #3
    • 7th Oct 17, 5:25 PM
    • #3
    • 7th Oct 17, 5:25 PM
    Depends. Mostly nothing more than £1500, more often than not a zero or sub £100 balance.

    The pain is that I can no longer rely on this card for using abroad for expenses - £500 won't last long on some of the trips I do.
    • noh
    • By noh 7th Oct 17, 5:30 PM
    • 5,116 Posts
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    noh
    • #4
    • 7th Oct 17, 5:30 PM
    • #4
    • 7th Oct 17, 5:30 PM
    Have you asked them to increase the limit?
    • dj1471
    • By dj1471 7th Oct 17, 5:31 PM
    • 871 Posts
    • 575 Thanks
    dj1471
    • #5
    • 7th Oct 17, 5:31 PM
    • #5
    • 7th Oct 17, 5:31 PM
    Do you regularly spend more than £500 a month on it? If not that's probably the reason they've lowered the limit.

    Your best bet is to apply for an alternative fee-free card such as the Creation Everyday:
    http://www.moneysavingexpert.com/travel/travel-credit-cards#compare
    • john1002
    • By john1002 7th Oct 17, 5:31 PM
    • 860 Posts
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    john1002
    • #6
    • 7th Oct 17, 5:31 PM
    • #6
    • 7th Oct 17, 5:31 PM
    I doubt you will change there minds to be honest but wait 4-6 months and just apply for a new limit to what you had, you may get it or a smaller one but should get an increase.

    It is a pain but have a search on here and you will see it happens all the time, it is easy to take it personally but your just a number and Iím sure you will get back.

    Happened to me and Iíve now got a higher limit than I had before they reduced it some 12 months ago.

    Good luck

    John
    • Superscrooge
    • By Superscrooge 7th Oct 17, 6:15 PM
    • 871 Posts
    • 600 Thanks
    Superscrooge
    • #7
    • 7th Oct 17, 6:15 PM
    • #7
    • 7th Oct 17, 6:15 PM
    According to MSE. Halifax credit cards use Experian and Call Credit rather than Equifax https://www.moneysavingexpert.com/credit-cards/credit-reference

    So probably worth checking the other CRA's just in case?

    Have you opened any other credit cards recently, or taken on any other loans, remortgaged etc?

    Bank of Scotland CC got spooked last year when I took out further 0% credit cards and twice reduced my credit limit with them.
    • chattychappy
    • By chattychappy 8th Oct 17, 4:21 AM
    • 6,350 Posts
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    chattychappy
    • #8
    • 8th Oct 17, 4:21 AM
    • #8
    • 8th Oct 17, 4:21 AM
    Could be somebody has pushed the wrong button, entered a "-" instead of a "+" when updating an algorithm....

    Some years ago Halifax did this to a cohort of perfectly good customers. Limits were reduced to £500 temporarily with a letter that told them that a month later their accounts would be closed. Happened to me on an account that was dormant. Couldn't understand it but wasn't bothered. Sure enough, the account was closed. A little later it was all discovered to be a terrible mistake and they were re-opening the accounts of affected persons on request.

    It was before the days of Clarity which I have since obtained. I'll repost if the same happens to me! My limit is £9600, but my outstanding balance is rarely more than £500 because I'm using it for foreign cash which I pay off within days.
    • Ben8282
    • By Ben8282 8th Oct 17, 6:21 AM
    • 2,030 Posts
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    Ben8282
    • #9
    • 8th Oct 17, 6:21 AM
    • #9
    • 8th Oct 17, 6:21 AM
    Such a massive credit limit reduction is highly unusual. Something in your credit files must have spooked them
    Last edited by Ben8282; 08-10-2017 at 10:27 AM.
    • photome
    • By photome 8th Oct 17, 8:04 AM
    • 12,726 Posts
    • 8,206 Thanks
    photome
    Such a massive credit limit .is highly unusual. Something in your credit files must have spooked them
    Originally posted by Ben8282
    £5000 isn't massive
    • Vortigern
    • By Vortigern 8th Oct 17, 8:19 AM
    • 2,273 Posts
    • 1,473 Thanks
    Vortigern
    Such a massive credit limit .is highly unusual.
    Originally posted by Ben8282
    £5000 isn't massive
    Originally posted by photome
    It's not unusual either.
    • Richey_
    • By Richey_ 8th Oct 17, 9:56 AM
    • 233 Posts
    • 258 Thanks
    Richey_
    £5000 is actually quite a low limit, £500 is an exceptionally low limit.

    Why not apply for the Santander Zero credit card which is very similar to the halifax clarity card

    http://www.santander.co.uk/uk/credit-cards/zero-credit-card

    Or appy for a Metro bank current account as they also do free European transactions. Then apply for an overdraft to go with it ?

    https://www.metrobankonline.co.uk/bank-accounts/products/current-account/

    If halifax don’t really want your business and see you as a risk (hence the major drop to limit their potential losses) just take your business elsewhere to somebody who does want you.
    • Roger1
    • By Roger1 8th Oct 17, 4:00 PM
    • 1,296 Posts
    • 565 Thanks
    Roger1
    ... it's a pain because if I'm abroad for work I can rack up £1500 - £2000 in expenses pretty quickly.
    Originally posted by PCN_advice_needed
    Are you travelling on business for yourself or for an employer?

    If the latter, then you shouldn't be funding your employer's expenses. Get them to provide a card for you or ask for a suitable cash advance.

    [Exception: if you want to earn miles, points or cashback, you may be happy to fund the expenses.]
    • adindas
    • By adindas 8th Oct 17, 5:01 PM
    • 3,259 Posts
    • 1,577 Thanks
    adindas
    I've had a Clarity credit card for some years, and I was surprised to see that my credit limit had been lowered by them from £5000 to £500 a few weeks ago. I use the card when abroad for cash withdrawals and paying for things as there's no transaction charges. There was a small balance on it but I paid that off pretty sharpish.

    On calling them, I couldn't get a clear answer - the person I spoke to put me on hold and spoke to the Lending department (apparently) who said it wasn't a change in my credit score with them, but it might have been something else.

    Having registered with Equifax and a couple of others to get free credit score reports they all look healthy and I'm at a loss to understand how to get the credit limit raised again - my financial circumstances and spending haven't changed radically and it's a pain because if I'm abroad for work I can rack up £1500 - £2000 in expenses pretty quickly.

    What's the best approach to finding out what data Halifax based their decision on, and if I need to what's the best way to follow the chain back to the original organisation which collected that data ?
    Originally posted by PCN_advice_needed
    Have you tried writing a letter to them ask to investigate further, nicely explain to them why do you think it might be a system error to reduce your limit. It is better even if you send them the copies of all CRAs reports you have got to save their time.

    My personal experience with the problem like this call normally does not work as you are just talking with an agent who can not make a decision, risk averse agent, lazy to investigate further. Unless of course they are willing to direct you to people who could make a decision.

    Talking with such kind of agent is just a waste of time as they will give you a generic answer and as such they just ask you to check your credit file, etc which you already know (based on your post, it all look healthy based on the report from CRAs)

    You will never know it might be due to mistake in their system, and you have been wrongly picked up by the system. If you write to them, you will get people with higher authority who will invest time to investigate it.

    But from the previous posts I have read a few people got their clarity card limit reduced because they hardly use it But it does not happen to me as I also have clarity card which I normally use it in the UK once in a month for a tiny transaction to keep it alive. I am using it for spending of a few hundreds pounds if I am traveling abroad.
    Last edited by adindas; 08-10-2017 at 5:21 PM.
    • bris
    • By bris 8th Oct 17, 6:30 PM
    • 6,920 Posts
    • 5,947 Thanks
    bris
    Card companies have a finite level of money they can lend on CC's. It could very well be they are near that limit so they can reduce what they will see as non profitable customers limits to free up funds they can lend elsewhere.


    There will have been a purge which could be thousands of customers seeing limits they never use reduced to free up millions they can lend elsewhere.
    • chattychappy
    • By chattychappy 8th Oct 17, 6:55 PM
    • 6,350 Posts
    • 3,334 Thanks
    chattychappy
    Card companies have a finite level of money they can lend on CC's. It could very well be they are near that limit so they can reduce what they will see as non profitable customers limits to free up funds they can lend elsewhere.


    There will have been a purge which could be thousands of customers seeing limits they never use reduced to free up millions they can lend elsewhere.
    Originally posted by bris
    I have a £9600 limit which I never use. Because I never use it, I can't see how reducing my limit would "free up funds". I'm sure CCs are well used to dealing with ratios - ie building into their financing the fact that most people don't borrow up to the limits. If there was some kind of "run" on the CCs, they could always decline transactions.
    • Toddy2
    • By Toddy2 8th Oct 17, 6:56 PM
    • 9 Posts
    • 0 Thanks
    Toddy2
    Halifax did the same to me, I had a £3k limit on interest free, which was running near the limit. They decided to reduce my limit to £2k which pushed me over limit and back onto the higher interest rate. Hence I transferred.
    Trying to get an answer was impossible! Good luck with yours...
    • YorkshireBoy
    • By YorkshireBoy 8th Oct 17, 7:06 PM
    • 29,444 Posts
    • 17,228 Thanks
    YorkshireBoy
    I have a £9600 limit which I never use. Because I never use it, I can't see how reducing my limit would "free up funds".
    Originally posted by chattychappy
    Isn't it to do with Basel III Capital Adequacy? Cutting your limit would "free up funds" (AKA capital reserves) to lend to someone else, ie give two of you £4.8K each or 4 of you £2.4K each in limits, without them breaching capital adequacy rules.

    So yes, the OP will be one of many (assuming there hasn't been a change in their CRA file monthly feed, or Halifax haven't changed their criteria for a certain segment of cardholders)...but many/most of them won't be posting on MSE to highlight the issue.
    • chattychappy
    • By chattychappy 8th Oct 17, 7:46 PM
    • 6,350 Posts
    • 3,334 Thanks
    chattychappy
    Isn't it to do with Basel III Capital Adequacy? Cutting your limit would "free up funds" (AKA capital reserves) to lend to someone else, ie give two of you £4.8K each or 4 of you £2.4K each in limits, without them breaching capital adequacy rules.
    Originally posted by YorkshireBoy
    I don't think so because the limit isn't actually being used (or committed to being used).

    I'm no banking expert, but I thought capital adequacy was more about deposit taking, ie how much of what you've taken you must keep "to hand" (for want of a better term). Again, I don't see how simply giving a credit limit to somebody has an impact on this - only when they spend and the bank has to advance the money (which may involve borrowing, too much of which could endager their ratio.)

    BUT, I suppose it could be that if they are close to a critical ratio, they might prune limits not because they are unused, but because you might use them.
    • Heng Leng
    • By Heng Leng 9th Oct 17, 11:40 PM
    • 4,121 Posts
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    Heng Leng
    Whilst not a big limit, £5000 isn't 'quite a low limit'

    £5000 is actually quite a low limit, £500 is an exceptionally low limit.
    Originally posted by Richey_
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