Morgan Stanley Cut Credit Limit - Perfect Credit History :(

ChloeRadshaw

I m really fustrated - My credit limit was 5K six months ago and I voluntarily asked for this to be reduced to 2K (as I was never going to spend more then 2K a month) - Its now been cut to £500!!!

I always pay my card off in full and have been with this company for 3 years. I earn 50K a year and save a lot of this.
I recently applied for the Abbey National Zero Credit Card and was turned down -

As far as I am concerned my credit is excellent and I have no other credit cards (but have had credit cards in the past which have now been closed voluntarily by me) - I have checked my credit file and there is nothing obvious here which would cause this.


Any ideas? Has this affected anyone else?

latecomer

You need to get a copy of your credit file and see what the problem is. Check out the article on how to get a free copy:

http://www.moneysavingexpert.com/banking/credit-rating-credit-score#check

You can also get a copy in the post for £2 per agency.

dhassen

yep there's somthing amiss if you can't get credit with those earnings and a good history. I assume you don't have any debt, and are on the electoral register where you live? Like latecomer says, check your files out.

Glitzkiss

ChloeRadshaw wrote: »

I m really fustrated - My credit limit was 5K six months ago and I voluntarily asked for this to be reduced to 2K (as I was never going to spend more then 2K a month) - Its now been cut to £500!!!

I always pay my card off in full and have been with this company for 3 years. I earn 50K a year and save a lot of this.
I recently applied for the Abbey National Zero Credit Card and was turned down -

As far as I am concerned my credit is excellent and I have no other credit cards (but have had credit cards in the past which have now been closed voluntarily by me) - I have checked my credit file and there is nothing obvious here which would cause this.


Any ideas? Has this affected anyone else?

Is this their platinum cash back card? If so it may simply be a computer error. Morgan Stanley did this to me last year and within a couple of months it was back up to 5K. You can expect a letter shortly telling you that they are reviewing customer accounts and are reducing your credit limit. some time after that if it is the same as last time there is likely to be another letter telling you there was a computer error and your credit limit has been reinstated :cool:

btw, last year it happened just after MS sold the cashback cards to Goldfish who have now been sold on to Barclays. perhaps there is a pattern forming here :rolleyes:

ChloeRadshaw

Yes it is one of those cash back cards

Probably a mistake on their side but I m pretty furious - It just makes me so mad that banks can behave like this

loveandlight

I know the feeling. I posted on another thread because I had a large credit limit and a perfect payment record/credit rating and the Co-Op slashed my credit limit without warning. Mine was because I wouldn't take out other products with them as I had the misfortune to go into my local branch to make my monthly card payment and they asked me to open a bank account with them and/or take out a new card but I wouldn't. Five days later they wrote and told me they have effectively cancelled my card as they have slashed my credit limit and it is almost non-existent now.

exel1966

ChloeRadshaw wrote: »

Yes it is one of those cash back cards

Probably a mistake on their side but I m pretty furious - It just makes me so mad that banks can behave like this

Probably NOT a mistake at all. It's VERY common for card companies to reduce limits in this way. It's been happening for the past 3 years at least and doesn't neccessarily have any reflection on your credit worthiness. You'll probably find at least 50 threads on the same subject here on MSE. Remember that they have the right to cut ALL credit if they so wish.

Most card companies review accounts every 6 months/annually and spending patterns are analysed as well as how much credit you're actually using. If they can see that you're not using the facility they quite often cut it.

Quite possibly some of your personal circumstance have also changed, your available credit ? Your % of credit compared to income ? Your used credit ? Your % of used against available credit ? A recent house move ? These are all important factors.

NickX

It also may have nothing to do with your credit file or recent actions.

The banks are reducing their exposure to risk at the present time. For every £1 that they offer in credit they need the reserves available should the customer draw on the facility. In the current climate these reserves are dropping, and as a result they have to reduce their exposure to debt. So unused Credit Limits are being slashed for exactly this reason and it is no fault of the customer concerned.

loveandlight

posted by Nickx
It also may have nothing to do with your credit file or recent actions.
The banks are reducing their exposure to risk at the present time. For every £1 that they offer in credit they need the reserves available should the customer draw on the facility. In the current climate these reserves are dropping, and as a result they have to reduce their exposure to debt. So unused Credit Limits are being slashed for exactly this reason and it is no fault of the customer concerned.

I agree with this also.

realshannon

Hi, this happened to me over the Christmas and New Year period, I didnt get a letter from them just got embarrassed at the till - which wasnt very nice. When I rang they couldnt care less and said that a letter was on its way, it did arrive but a few weeks later. Never did get an explanation and a while later got letter saying that the business was being transferred to Barclays, we have cards with them, so assume they have looked at the total credit limit between Morgan and Barclays and done it for this reason? I was very cross at the time but decided there are plenty of other providers who want the loyal business and took my custom elsewhere. There wasnt anything wrong with my credit file etc etc just big businesses being blase:rolleyes:

Glitzkiss

exel1966 wrote: »

Probably NOT a mistake at all. It's VERY common for card companies to reduce limits in this way. It's been happening for the past 3 years at least and doesn't neccessarily have any reflection on your credit worthiness. You'll probably find at least 50 threads on the same subject here on MSE. Remember that they have the right to cut ALL credit if they so wish.

Most card companies review accounts every 6 months/annually and spending patterns are analysed as well as how much credit you're actually using. If they can see that you're not using the facility they quite often cut it.

Quite possibly some of your personal circumstance have also changed, your available credit ? Your % of credit compared to income ? Your used credit ? Your % of used against available credit ? A recent house move ? These are all important factors.

Whilst I understand that companies review accounts regularly and do cut limits the fact that this has happened before to account holders with this card indicates, to me, that it is likely to be a mistake. Especially as they cut the limit to the same figure as last time.

btw, I was sorting out paperwork yesterday and came across the letter apologising for the mistake and reinstating my credit limit back in November 2007. Unfortunately I must have shredded the first letter telling me my limit had been drastically reduced.

Chloe, can you let us know if they reinstate your limit in a months time. I'm just curious to see if this is something we can expect everytime this account is sold on.

ETA: found the thread from last year. And there's a link to another thread in there too.

http://forums.moneysavingexpert.com/showthread.html?t=590874&highlight=morgan+stanley

I am now very curious to know if it's the same as before or if Barclays are cutting back the credit limit of MS customers