Barclaycard reduced limit - legislation?

creditcardnewbie

Hello to you all,

Well, I have been reading about people on the boards here getting their Barclaycard limits reduced without warning and they have finally got round to me.

I had a limit of £4,500 with them and they reduced it to £4,000. I asked them why because I have never missed a payment and got the usual answer "the conduct of your account and a score supplied by the Credit Reference Agency etc etc."

Anyway, I was wondering if there is any legislation available such as Freedom of Information Act that would allow me to request a copy of anything Barclaycard received from the credit reference agencies that influenced their decision? Or, has anyone else written to them for more information?

Any advice you can offer would be great. Thank you in advance.

:beer:

NickX

creditcardnewbie wrote: »

I had a limit of £4,500 with them and they reduced it to £4,000.

Well that decrease isn't too bad compared to some of the other reports on here. Some have had Barclaycard reduce their limits to as little as £250.

However, at the end of the day it is up to Barclaycard as to how much they want to loan to a particular individual and if they want to reduce the facility then they have the right to do so.

In all honesty I don't think you would get very far with a freedom of information request. Just think about the 161,000 customers of Egg who had their facilities completely removed earlier this year. Egg gave similar reasons and despite an outrage of complaints, they have got away with it. Just a sign of the times I'm afraid.

Moggles_2

creditcardnewbie wrote: »

I was wondering if there is any legislation available such as Freedom of Information Act that would allow me to request a copy of anything Barclaycard received from the credit reference agencies that influenced their decision?

You can order your credit reports from the credit reference agencies. It's a good idea to check these from time to time. This, after all, is the information lenders like Barclaycard see when they search your credit files. (For help, see the *How to obtain credit reports* sticky.) Btw, additional services like credit scores are a nice little earner for the credit reference agencies, but of little practical value IMO to credit card customers, so not worth paying
extra for

None of us - including the CRAs - knows what criteria are used by their clients, when scoring us. Each company has its own methodology and will not disclose this information. Presumably because to do so would invite credit card applicants to try to be economical with the truth.

londonuk2008

If you want to see what info they hold on you , you can send £10 for a subject access report and this will show all info they hold on you including statements.
I did this after my limits going up and down and was interesting. I have no bad CRA or missed payments or ccj's , so could;nt understand also.

creditcardnewbie

Many thanks to Nickx, Moggles and Londonuk2008 for your replies,

I am not too upset about the reduction from £4,500 to £4,000 in all honesty - I think I got off pretty light but I am just curious to see what criteria Barclaycard are using to make their decisions or if they are just doing a sweep of all accounts regardless of how good someone's credit history is.

I have recently viewed my credit reports and everything is in order with nothing new standing out on them.

Your post is very interesting Londonuk2008 - I think I may apply for a subject access report to see what they hold on me. Likewise I have never missed a payment or ccj's etc. Barclaycard said they are sending me a letter about their decision shortly so I'll see what that says before applying for the report.

Many thanks to you all again,

creditcardnewbie

MABLE

creditcardnewbie wrote: »

Hello to you all,

Well, I have been reading about people on the boards here getting their Barclaycard limits reduced without warning and they have finally got round to me.

I had a limit of £4,500 with them and they reduced it to £4,000. I asked them why because I have never missed a payment and got the usual answer "the conduct of your account and a score supplied by the Credit Reference Agency etc etc."

Anyway, I was wondering if there is any legislation available such as Freedom of Information Act that would allow me to request a copy of anything Barclaycard received from the credit reference agencies that influenced their decision? Or, has anyone else written to them for more information?

Any advice you can offer would be great. Thank you in advance.

:beer:

A little while ago I highlighted this that BC do obtain a score on a regular basis from a Credit ref. agency. At the time I was told this was not the case but you have proved it is.

brightonman123

probably a good thing (in disguise!) - b/card reducing their exposure all round, and any cardholder's temptation to go mental on their cards..

though if the reduced limit goes below current balance and then starts incurring charges, thats something different, and worthy of MSE_Martin's attention!

NickX

brightonman123 wrote: »

though if the reduced limit goes below current balance and then starts incurring charges, thats something different, and worthy of MSE_Martin's attention!

I don't think they would be allowed to do this.

Even Egg allowed their cancelled customers to pay off the debt over a period of time without incurring additional charges.

PAULUK08

MABLE wrote: »

A little while ago I highlighted this that BC do obtain a score on a regular basis from a Credit ref. agency. At the time I was told this was not the case but you have proved it is.

Barclaycard admitted this too me a little while ago.

tictax

Probably the biggest reason why Barclaycard have reduced the credit limit is to save capital that they need to hold.

All the banks have to comply with the Basel 2 legislation which is overseen by the FSA in the UK. Basel 2 deals with the amont of capital which a bank needs to hold. The amount of capital is determined by looking at the assets of the bank which will include your credit card and the outstanding balance but from 1 January 2008 when Basel 2 was introduced the undrawn credit facilities ie the unused limit on a credit card need to be included also.

The method of calculating the capital is through a complex mathematical formula but one of the factors is the probability of a customer defaulting (PD)on their account within the next 12 months. This information will be based on credit information which the credit reference agencies supply (usually on a monthly basis). This data will then go through internal models which Barclaycard will have spend millions of pounds developing to give a PD which is used in the capital calculation.

So what? you may ask. Well remember that the banks are currently experiencing funding issues. For every £ that the bank needs to hold to satisfy banking regulations that is £ that cant be used to make more money. It therefore makes sense for Barclaycard to reduce limits to help the larger Barclay group to make more money.

Superheavy

Must admit that with all the threads on this board at the moment about Barclaycard, I'm chuffed I've been in a situation to pay off and cancel my Barclaycard.

As for the actual reduction in lending liabilities, I think tictax is right on the money with that explanation, letting the Barclays group send that capital to other areas.