Barclaycard dropping their credit limit

gemfiveashdown

Hi all, this is my first post, so please let me know if it's been raised before.

I recently applied for a Barclaycard, and was approved, and received my card on Thursday 31st July. The letter accompanying the card stated my credit limit was set at £2,000 (with £600 inclusive limit on cash withdrawals) and when I phoned Barclaycard to activate this credit card that day, the lady on the phone again confirmed that my credit limit was £2,000. I used the card over the weekend for purchases, both in shops and online, and withdrew £100 as well.

On Tuesday 5th August I tried to withdraw a further amount but was unable to. I assumed this was just a minor issue and thought nothing of it. This morning (6th August) I tried to pay a bill over the telephone using the card, and it was declined. I called up Barclaycard to see why the card had now been declined for cash withdrawals and purchases, and was then informed that my credit limit "had been reviewed on 4th August and has been dropped to £450".

Am I being incredibly naive here, but if I have been approved for £2,000 on the Thursday, how can my circumstances change so dramatically that I only qualify for £450 credit on the Monday (just over a fifth of the original credit limit)? I put in a complaint to Barclaycard as I had not been informed of this credit limit decrease, and was informed that a letter had been sent to me on Monday. I tried to explain to the lady in customer services that this would not have helped me had I, say, been doing a full weekly shop and expecting to put it on the Barclaycard, safe in the knowledge I had a large amount of credit on it, only to be declined at the checkout. The lady in customer services could only state that I can check my current status online - is she actually suggesting I should 'check in' every day incase Barclaycard decide to change my credit limit?

Unfortunately a lot of the purchases I made were not essential items, but are not returnable items either, as they consisted of birthday presents and cinema tickets, as well as the cash withdrawal. I am now left having to re-assess my budget, as a lot of my planning was including the confirmed £2,000 credit from Barclaycard!

Has this happened to anyone else, is it within their rights morally and legally, and do I have a base for making a complaint against Barclaycard for treating me this way in such a short period of time being their customer?

Thanks all,

norfolkpaul10

I am an existing cardholder for some years, and have always had a rate of 17.9% but last month I was told it would change to 22.9%! I complained and was told that they now get a score every month for every customer and mine was now low! I got reports from Equifax and Experian and found that Equifax was good and Experian was very bad; only because of the amount of debt I have, and not because I have done anything else wrong. This means that if that is the case, the Credit Reference Agency scores now directly influence our APRs. This could be why they suddenly changed your limit. Maybe they are influencing those too. I talked to Experian and it turns out that they changed the way they calculate scores earlier this year, and now take into consideration the amount you owe in total! Hence as I do owe a lot I am now in their worst category even though I have never missed a payment or been over a limit in 5 years. Whilst I can see the point to this, it does begin to make me wonder where it will all end. I am now resolving to reduce my balances as I can see this whole thing snowballing if all the other lenders follow suit.

bengal-stripe

gemfiveashdown wrote: »

I used the card over the weekend for purchases, both in shops and online, and withdrew £100 as well.....On Tuesday 5th August I tried to withdraw a further amount but was unable to.

Unfortunately a lot of the purchases I made were not essential items, but are not returnable items either, as they consisted of birthday presents and cinema tickets, as well as the cash withdrawal.

I suppose, the computer identified you as a "frivolous spender" on a spree.

gomer

bengal-stripe wrote: »

I suppose, the computer identified you as a "frivolous spender" on a spree.

I had wondered that myself to be honest. They do tend to look at your spending habits in order to assess risks & a person making several transactions close together immediately on recieving a card might well attaract slightly more attention than a person who barely spends anything straight away.

As disappointing as it is this happens all the time & numerous people have all had the same issue with credit limits being reduced without warning, especially when the 'Credit Crunch' reared it's head.

JayZed

Count yourself lucky. If you're using your new credit card to withdraw cash you're going to find yourself stacking up huge amounts of interest and getting into silly debt. Were you actually intending to pay off £2,000 at the end of this month? If not, then you're probably better off without that kind of credit limit.

Putting more than £450 on the card in your first weekend with non-essential purchases and cash withdrawals would certainly ring alarm bells with me if I were the lender - it would suggest to me that you're a risky borrower.

juliejuly4

Lots of threads about Barclaycard suddenly reducing limits - I have both Visa and Mastercard and they started reducing the limits, just by £200 or so, but annoying nonetheless.

Still, I've been paying off the balances, and reducing the limits as I do so, at the end of the day, its their loss (regular customer with rolling balance and 10 years with no missed payments, overlimits etc).

Have a Mr T card now, 0% for 3 months on purchases, and 13 months % BT. Spent a bit on holiday, repaid, and now transferring the last of the Barclaycard. Accounts get closed next month.

I love this moneysaving - why pay Barclaycard when I can keep the money myself. Not long now, and all my money (bar the essentials) is mine

gemfiveashdown

JayZed wrote: »

Count yourself lucky. If you're using your new credit card to withdraw cash you're going to find yourself stacking up huge amounts of interest and getting into silly debt. Were you actually intending to pay off £2,000 at the end of this month? If not, then you're probably better off without that kind of credit limit.

Putting more than £450 on the card in your first weekend with non-essential purchases and cash withdrawals would certainly ring alarm bells with me if I were the lender - it would suggest to me that you're a risky borrower.

Hi. I'm not suggesting I was going to use £2,000 in one month, no, however I had planned my spending taking this into account. As stated, the interest on taking out the cash worked out less than the charges for going into my overdraft in my current account, which I could then use later to pay off the credit card, but you carry on casting aspersions, I don't mind.

And from a lender's point of view, surely they should react as to how items are paid off, as I have every intention of paying these items once I receive my wages for my second employment (I currently work two jobs - one paid weekly and one paid monthly, but have not received my first wages for the monthly paid job) were paid through to me.

As stated above, I wanted to see if this has happened to other people - with the creedit limit being reduced so drastically less than a week after receiving the card, and the customer not having any details or information about this happening.

Staciep88

Just checked OH credit card on line and they have lowered his limit by £50 - dunno what the point of that was, it was £4k now £3.95k bit silly really

Moggles_2

gemfiveashdown wrote: »

I wanted to see if this has happened to other people, with the credit limit being reduced so drastically less than a week after receiving the card and the customer not having any details or information about this happening.

Yes, this practice has been reported here frequently in recent months.

I'm a longstanding Barclaycard customer, but I wouldn't recommend B'card at the mo. Among the other criticisms that have cropped up on this board:

1) rate-for-risk policy
2) high percentage of outright rejection
3) low credit limits
4) habit of refusing new customers BTs even when card was promoted primarily as a BT card.
5) Will not accept BTs from Abbey, Bank of Ireland or Ulster Bank
6) rounding down minimum payments
7) backdating residual interest from statement date
8) always reports late payments (even when CSAs have promised otherwise because it was only one day late.)

On the plus side, Barclaycard holders receive regular existing customer deals (including 0% BTs and 0% on purchases) and its online services are good. Telephone back-up is dire
though :rolleyes:

gomer

gemfiveashdown wrote: »

Hi. I'm not suggesting I was going to use £2,000 in one month, no, however I had planned my spending taking this into account. As stated, the interest on taking out the cash worked out less than the charges for going into my overdraft in my current account, which I could then use later to pay off the credit card, but you carry on casting aspersions, I don't mind.

And from a lender's point of view, surely they should react as to how items are paid off, as I have every intention of paying these items once I receive my wages for my second employment (I currently work two jobs - one paid weekly and one paid monthly, but have not received my first wages for the monthly paid job) were paid through to me.

As stated above, I wanted to see if this has happened to other people - with the creedit limit being reduced so drastically less than a week after receiving the card, and the customer not having any details or information about this happening.

It's not policy to tell you when they reduce the limit because in theory if they told you theu are reducing the limit in 3 days time you could go out & spent the lot before the limit gets reduced - they have to cover themselves, also your initial spending habits can & do give the lender an indication of any potential future risk factors.

A person who barely spends anything on first recieving a new card will not attract as much attention as a person who makes several transactions, withdrawals etc immediately on obtaining the new card.

In all the years i have been with Barclaycard i have never had my limit reduced & i only use my Barclaycard for odd routine bills never going over a certain amount each month & never withdrawing cash etc, but i know people with the same card & the same limit having thiers reduced drastically & the only difference is that they use thier card ten times more than i do so there is clearly a pattern to which 'type' of spenders seem to get sudden unexplained credit limit reductions & which ones don't.

Bismarck

My belief is that withdrawing cash sends a lot of bad signals to the provider whether you like it or not.....it may seem a nonsense but you're OK to spend (within reason) on a card but the moment you withdraw cash you give the provider the jitters that there's something to be concerned about. They publish the cash limits available to you but you would pay dearly for them in terms of the fees, the way the interest is calculated, the rates themsleves and the signal it give the lender.

sorry if this comes too late for you....