First Direct Credit Card - limit decreased without notification

AnnieMD

On checking my accounts on-line, I noticed that my First Direct credit card had had its limit reduced from £1800 to £500. I had not been informed of this.

I contacted First Direct who said that they were reducing credit limits for a number of people and the letters were being sent out.

I asked whether if I had used the card and gone over the new reduced limit I would be charged a penalty for doing so and the customer advisor said that, yes, I would have been!

I asked why I wasn't informed prior to the reduction taking place and she told me that they were in the process of sending the letters out.

I've never gone over my credit limit and have always either paid the minimum payment or else cleared the balance outstanding so it wasn't due to mis-use. The customer service advisor agreed and said that it was "just something we are doing".

So, buyers beware - do check the credit limit on your First Direct credit card before going shopping.

(I have now closed the account down.)

BoltonMinx

Its probably because they arent making any money off you Sounds silly though, you'd think they'd notify the customer first

miss_lisalou

I must admit, I'm a staunch defender of First Direct, they've always proved brilliant for me. As for reducing credit limits, they'd hardly be the only card provider to do so, I've had that happen in the past and when I enquired about it was advised it was because I'd recently opened a new card with £x limit, so this card would be reduced to reflect the overall amount of credit available to one person, which makes sense to me.

As for them not advising you, it should be on your statement and any separate letter you may receive. If you go over the new reduced limit without this knowledge you'd have a good case for complaint and having the charges refunded.

AnnieMD

I've just opened a new Virgin card, so that might be it.
I was just surprised at not being told.

Thank you

Caped_Avenger

As you were told by the Customer Service rep you spoke to, it's something that fd are doing. If you don't mind me asking, have you recently been near the £1800 limit (or had a balance as high as £500, for that matter?). How often did you use the card?

It sounds like an initiative to reduce bad debt to me, given the current financial climate.

miss_lisalou

No problem Annie, must admit I felt a bit suprised and offended when it happened to me until the explanation on the new card was explained. Obviously they do periodic checks on credit files etc to ensure limiting risk on their part.

AnnieMD

Hi Caped Avenger

I had once gone up to the limit and it was at £1500 for a while, but recently I'd been using it for general grocery shopping and paying it off in full.

We've just moved our mortgage twice so that might be it too.

Rafter

There are also complex rules for banks about how much they need to hold in 'reserves'. This is called regulatory capital.

There is a requirement for the banks to hold money, even against unused credit limits.

If you haven't used your card for a while or never go near your limit, you will probably find the limit gets reduced more and more often.

R.

Reaper

AnnieMD wrote:

I've just opened a new Virgin card, so that might be it.

D'oh! I pressed the thanks button instead of the reply button - in case you were wondering why I thanked you!

Anyway, what I was going to say is this won't be the reason. Being part of a different group they will not be aware you have taken out the Virgin card. They will only discover it if they do another credit search, but they can't do that without a good reason, such as you applying for more credit with them.

As Rafter says it is more likely they are trimming people's unused credit limits. I'm surprised they didn't send the letter out first though. Maybe the letter will give a better explanation when it eventually arrives.

Caped_Avenger

Reaper wrote:

As Rafter says it is more likely they are trimming people's unused credit limits. I'm surprised they didn't send the letter out first though. Maybe the letter will give a better explanation when it eventually arrives.

The letter will be triggered immediately when the limit reduction takes place on the system. This gives a slight window after the decrease has taken place, but before the letter arrives, for the customer to check their limit online, and notice the decrease.

AnnieMD

Thank you - that's much clearer now. I hadn't used the card for a while so that will be why.