Has your Credit Card limit been reduced?

magiciansgirl

philip99 wrote: »

This sums it up:

The credit scoring models don’t take into account limits cut by creditors to minimize their own risks. So a limit cut that leaves the debtor essentially maxed out can only protect the lender and harm the debtor. This seems grossly unfair since the debtor isn’t given ample warning or notice to clear the decks and instead is caught by surprise.’

I couldn't agree more, and I pointed this out to M & S when protesting. Said they had a duty not to damage my credit score. They failed to respond on this point..... I haven't got any 0% balance transfer options or I'd be off....

aaronhammer

Current account provider: Abbey/Santander
Credit Card limit before change: 1500
Credit Card balance at time: 730
New Credit Card limit after change: 810
Whether this happened due to the way you run your account: Not sure - haven't been informed.
Any charges incurred as a result: Would have been putting another debt onto this card which would have been a lot less interest, so in a way yes. By Santander no.
Whether you were notified beforehand: No, rang them and they can't tell me when they did it, or when a letter was sent.

My question is after checking the terms and conditions
applyonline.abbeynational.co.uk/OnlineAppsWebCC/static/terms_and_conditions_popup.html (put https:// in front to view them)
point 8.5

If we change the charges which apply to your Account or make any other changes to the terms of this agreement, the notice we give you will be at least 30 days' prior personal notice if the change is to your disadvantage,

surely they should have informed me?

gazelle8760

Nationwide Building Society seem to have the "Reduce" customers credit limits, down to a fine art!

Having been persuaded to take out one of their Cards back in May of this year, I was advized that my new Credit limit would be £2800, this surprized me, as I was fairly new to Nationwide, and did not even have my Salary paid into their flex account at that point.

I used my Card for Balance Transfers etc, which looking back seemed pointless, as I always pay the balance off in full, never the less, it came to my sixth statement, Nationwide had taken out the full payment DD on November 26th, for £1550, which I was then going to use for Christmas Shopping in London at the start of December.

I rang their Customer Service department, to see if I could perhaps raise my limit a bit higher, to be told they could not do it manually, but would have to have it reviewed, which I was happy for them to do, as I had nothing to hide.

I heard nothing from them, so the day before leaving for London, I checked Nationwide on-line, and was shocked to see that my current balance was £501, amount to spend was £99. They had reduced my limit to £600.

As they are not 24hrs, I could not ring them until the next day, after speaking to three or more advizors, I was put through to a manager, who decided she would temporarily raise it to £1100 to cover my expenses, and this increase would be until December 17th. I tried to explain that it must be a mistake, and that I had received nothing to inform me of this. The morning I left for London, they had written to me, stating they could not raise my limit at this time, but would be reviewed and thanked me for my interest, nothing was said about the limit being decreased. I did not receive their letter stating this until about a week or so after the event.

Since then, I have been fighting to get this limit increased to something more sensible, bearing in mind that the card was being used, monthly and for large amounts, £600 limit is of no use to me, and if Nationwide wish to lose custom over this, then that is their problem, but I won't go until I have exhausted all avenues. To insult me further, I had a letter from an advizor, in their Customer resolutions team, dated 11th, December, stating following my appeal, they have decided to raise my limit to £1000, which they feel is better suited to both my needs, and theirs, it will be reviewed in four months, so thinking I was getting somewhere, I rang the said advizor, who wrote the letter, and she tells me she had mis-lead me, and the increase she referred to was the temporary limit increase, it had not been increased to £1000 after all, it was still at £600.

Nationwide should be totally ashamed of how they treat customers, and how they mis-lead their customers, their dirty tactics of how they wait for customers to pay their balances off first, and then reduce their limits is totally wrong, I could have used that money for other things, I have never known Lloyds or Capital One to reduce my limit before, they either give me an increase, or they don't, they just don't suddenly reduce it because you have asked. It would be interesting to see whether anyone else has fell into the same trap with Nationwide, or am I just having a run of bad luck with them, needless to say, you cannot plan your spending habits with Nationwide, as it seems your Credit Limit can, and does change on a regular basis, Nationwide take note.....................I am not the type to give in easily, you will be more fed up of me complaining, than I will be of your useless bit of plastic.

minimadtrix

My poor 80 year old friend had a credit card with Halifax. He got into a bit of financial difficulty and was being charged for non payments and late payments - he was paying twice in one month, thinking he was ok not to pay the next month etc etc.

Anyway, thankfully he's a hoarder and kept all his statements. I was campaigning for him to try to get back some of the fees as being excessive. However, as I was looking through, I noticed that they kept dropping his credit limit after he made a payment. However, the interest they then charged him took him over the limit again.

The total he had been charged in various fees over the previous 2 years amounted to £1200, despite him always making a peyment every month (albeit at the wrong times!)

So, we sent of Martin's templates to try to get the bank charges reduced/refunded, with an extra emphasis that they were making him go over his limit and that they were to blame for the extra charges for going over the limit.

Iniitally they offered the difference on all charges above £12 as per the template. So, we wrote back again and said no, this wasn't good enough. They looked into it, agreed it was wrong what they had been doing and refunded him £1200!!!!!! What a success

However, by this time, our friend only had £900 on the card, so they would put the full refund onto his card, but then send him a £00 cheque.

Great, all sorted you might think. No.

As they were doing this, I told my friend not to make a payment that month and that we would check his balance over the phone to confirm he now had a zero balance. Indeed he did, so no payment made.

The very generous Halifax then charged him £12 non payment on his next statement.

We rang and asked how this could be. 'Our credits to an account are not classed as payments' was the response. So, I asked, how can you make a payment on a zero balance? Payment due date was something like the 16th, but there was a zero balance on the 10th.

Customer Services were having none of it. So, I asked to speak to someone hired, who said 'as a goodwill gesture' they would remove that charge. Gee thanks.

The card has now been cancelled.

marksoton

Surely the best route to take is to vote with your feet gazelle !

Dylanwing

It's just great at the moment playing 'Guess the limit' with my Sainsbury card. A few years ago it was over £5,000, then reduced in line with a payment of about £1,000 to the account. Then it just reduced slowly as I made payments, then a lump sum deposit meant the limit moved to £450. Still following? A few Months later, some payments and no use mean it became £250. A few more Months later and it increased to £450! Was I back in favour? No, last Month it was back to £400. With most of these I have had no letter, I find out only if the card is declined, or on receipt of the statement.
I know I could pay it off, but I don't pay much interest, hardly use it, certainly never rely on it, and it keeps me amused watching the limit fluctuate. I have put it in a drawer, so it will be interersting to see if the limit goes down with the payments, or up to encourage me to use it!
TBH, if they carry on like this the Banks will be the big losers. A credit card that you cannot rely on is absolutely no use, so I suspect that a lot of us are looking at paying off the balances, and just giving up on cards. I can understand the need for caution, but the current situation seems very random and just based on a computer, with no provision for human intervention or common sense.
On the plus side, my wifes Laura Ashley card was cut from £7600 to £700! No idea why the limit was ever set so high.

freddie0

I have had a sainsbury's CC for about a year, and the interest was due to kick in this month. As a result I balance transferred to a 0% a couple of weeks ago, and now only use this card for my company expenses. This means that it is used a few times a week, and then paid off in a couple of weeks - ongoing.
This morning I had a call from said Sainsbury's bank asking to call back, so I rang and whilst waiting in their queue I logged into my account online. They answered before I could log in, turns out it was their collections department asking when I would be paying the amount over my limit. Checked online and I was showing £78 over limit. Agent explained that they had reduced my limit on the 18th (2 days ago) and sent a letter (not received). On looking they had also added charges for being over the limit, which they have made me!
Old limit £1500
Balance £266
New Limit £200
plus charges £12!!!
They couldn't explain why, no late payments, tried to blame credit status til I pointed out I just got anoth CC in last 28 days with 3 times the limit they originally had.
The department I need to speak to is not open til Monday, so I have to call back then. Pee'd off as I am away on business Monday and have to pay for food, fuel, and hotel which would normally just go on here to keep seperate from normal household stuff.
Worried this could affect my credit rating too???
If not then I will simply apply for another card somewhere on 0% purchases and close that account, but don't want to apply if they knocked my rating. I'm assuming the reason why they've reduced it is due to them realising they aren't going to make much out of me and consequently spat the dummy out. But surely they can't take your limit below your balance in this way without any prior notification????

izools

Just looking at this thread would I be right in saying Sygma cards don't cut limits in the way the big boys like HBOS, Barclaycard, etc, do?

carlislelass

I paid a lumpsum to Barclaycard then had limit reduced by same amount. No letter received

never-in-doubt

The reason lenders will not write to you is because they realise a lot of us pay in full, and use some of the limit again next month and so on. If they wrote and said, 'if you pay your account off we'll reduce your limit' - would you pay it off?

Thus they just reduce it and send a letter the same day, usually 2nd class post.

Tight sods - they are disgraceful.

I heard of someone paying all their wage in to clear the balance in full - then they planned to use it for the month, thus getting rid of cash interest rates etc - they reduced her limit and she only found out when Tesco declined her at the checkouts. She couldn't even buy any shopping. Limit was £2k and reduced to £100. I mean, why bother?

If they'd used the rate jacking system the client would be allowed to repay the debt at the existing terms so why not allow the same when they reduce the limit, or simply close the account? Its a joke.

I think they do it to get rid of customers they don't want, its like a larger version (cull) of rate jackers but instead of allowing them the chance to repay using rate jacking terms, they simply reduce the limit knowing there is nothing we can do (legally or otherwise).....

Disgraceful. Oh for the record that was Barclaycard as well.