Sainsburys Visa

regularsaver1

Ok, so i have a Sainsbury's credit card, and so I haven't used it for a while, but I may do.

This week I received a letter proposing (more like giving me no choice) that they will close my card in 30 days and that in the interim they have reduced my credit limit to £100.

They state the reasons are to make way for new cardholders and new credit limits.

Are they all like this? I thought that you could keep a card for emergencies.

Dave_the_Ginger_Cat

regularsaver1 wrote:

Ok, so i have a Sainsbury's credit card, and so I haven't used it for a while, but I may do.

This week I received a letter proposing (more like giving me no choice) that they will close my card in 30 days and that in the interim they have reduced my credit limit to £100.

They state the reasons are to make way for new cardholders and new credit limits.

Are they all like this? I thought that you could keep a card for emergencies.

Many are taking the opportunity to close down dormant customer accounts. It costs them money to keep them open, both for the administration, plastic issue and for the cost of borrowing the funds to back up the credit limit. I'm sure you would not want to be denied an account as the bank had used up all its borrowing power based on customers who were not using their accounts - extreme I know but the principles are the same!

As they say, it can make way for other customers. They are in it to make money (as we are in it to save money!) and don't want a customer base who is not spending.

To me this is reminiscent of about 5 years ago when the building societies closed accounts where there was minimal balance or activity - it's still about profit, and you will get little choice, I'm afraid.

I'd recommend if you want to retain an account with an organisation, use it every so often.

DTGC

regularsaver1

Yeah it makes sense, but I've heard stories of a lot of Sainsbury's card applications being denied at the moment.

I think it was just where they'd put in the letter "we propose" when they'd already reduced my limit to £100.

I'll use another card should I need to

Dave_the_Ginger_Cat

regularsaver1 wrote:

Yeah it makes sense, but I've heard stories of a lot of Sainsbury's card applications being denied at the moment.

I think it was just where they'd put in the letter "we propose" when they'd already reduced my limit to £100.

I'll use another card should I need to

Yeah - a lot of the banks are reporting pressure on their financial figures right now. Not doom & gloom, but certainly some more prudence. Have a read through the press reaction to Alliance & Leicester today - whilst they no longer have a card book, they say in their annual reports that they have tightened their criteria for personal loans more than once this year, and the losses are still present.

I think we'll continue to see lenders turning away an element of their applications. Whilst I'm greatly in favour of moving accoutns to save/make money, there may be an argument for maintaining some of the core banking relationships that you have.

Completely understand on the poor use of the word 'propose'. If you have the energy, tell them!

See what 2006 brings (and the rest of the reports - it's Royal Bank Group tomorrow!)

DTGC

regularsaver1

where I work reports wednesday i believe

AQUA-IAN

I am sure this is going to be the norm soon. Thanks for highlighting the situation. :money:

JollyNolly

I can kind of see the logic here, but my experience at the moment is the opposite - my wife has a LTSB credit card which we have paid off (it charges some horrendous rate of interest) but not cancelled. Over the last twelve months they have raised the credit limit on the card from £9000 (Feb 2005) to £14000 (Feb 2006) - without being asked!! We certainly never use it now, as it is far too expensive. Difficult to see what's going on here, but perhaps they think we can be tempted to use it again?

regularsaver1

Actually although they reduced the limit to £100, they do suggest you contact them if you want to use you. maybe they are suggesting to use it