Nationwide lowering credit limit

zz9pa

We've just got a letter through from Nationwide saying they are reducing our credit limit to under £1000..

We only use the card when we're abroad (thanks MSE ), we always pay it off in full, we should have an excellent credit rating etc etc.

When we phoned up - they basically said they were lowering it because 'of the current climate' and the 'month by month conduct of the account' ?!:mad:
Said it had nothing to do with our credit rating and we could go in to a branch to complain (we couldn't do anything about it over the phone)..

Needless to say - [STRIKE]I've taken this as a huge insult of my honour and have vowed vengence[/STRIKE] I'm a little annoyed.

Anyone else had anything similar ?

withabix

Yes. Very common at the moment.

The key phrases you used give the game away:

We only use the card when we're abroad (thanks MSE )

= you cost Nationwide money in overseas charges that they don't pass on to you.

Combined with:

we always pay it off in full

= no interest = no income for Nationwide from your card.


Why would they want you as a customer? They don't make any money from you, in fact your spending profile would actually cost them money.

They are trying to discourage you from using their card by lowering your credit limit. If you use your card regularly and earn them interest, if you have a good credit rating, your limit will magically start to rise again...

Barclaycard have done this to me on my 'emergency' cards, progressively lowering the limit on one of my cards that I never use (as it has a higher APR than my John Lewis card), resulting in it now having a limit of £300!!! It used to be £3000...

withnell

It's also a security measure - if your details were cloned abroad, then only 1k could be run up.

Also if you're not using the card apart from abroad, do you need a huge limit?

withnell

withabix wrote: »

They don't make any money from you

<snip>

They are trying to discourage you from using their card by lowering your credit limit. If you use your card regularly and earn them interest, if you have a good credit rating, your limit will magically start to rise again...

Someone who pays off the card every month but uses it regularly isn't making as much for the CC company as someone with a huge debt run up, but then there are 2 key points:
a) They get fees from each time the card is used, so make cash from that
b) Someone who pays off each month doesn't have the same risk as someone with a 2k debt, who might then not pay back.

I pay off my bill each month with cashback - and barclaycard recently made me a cash gift to appologies for my cashback offer ending!

withabix

withnell wrote: »

a) They get fees from each time the card is used, so make cash from that


Not from the OP they don't, as they ONLY use this card abroad, incurring CHARGES for Nationwide, which will outweigh any card fee they may get, however I'm pretty certain the only companies who get a transaction fee are the ones who operate the card machines, which AFAIK, Nationwide do not.