Barclaycard reduced my credit limit by 93% - has this happenned to anyone else?

Reformed

Last month my credit limit was reduced from £3565 to £260. It was reduced on the 30th July - I became aware of the reduction on the 3rd August when I logged on to my barclaycard online service. I thought it was a mistake! The letter informing me of the change in my limit was dated the 30th July but it did not get into my letter box until the 5th August.

I checked my credit report...spotless... I have also never defaulted on a minimum payment to Barclaycard - in fact all my payments are above the minimum, if I don't pay it off every month. I frequently spend £1,000+ a month on this card.

I think my limit was reduced as I am the main card holder but as I have not been working in the last 18 months I have no income as such - I am reliant on my partner as the sole breadwinner for the family. Anyway be that as it may I complained on three counts.

1. The way in which I was spoken to, as though the reduction was a direct result of me mismanaging my account or other financial products I might have (not paying etc...) rather than being a change in circumstance resulting from a credit reference agency - this was only explained by the fourth person I spoke to.

2. Having my credit limit reduced by 93%! That is a phenomenal reduction!!

3. Finally I complained that there must be other families in a similar situation who manage their spending through their credit cards and this could be problematic for them to have their limit reduced by such a lot and it was irresponsible to be using a mailing service to inform customers of this reduction that takes almost a week - they have our email and phone numbers - why can't they take a more direct approach.

Does anyone else agree with me? I've had a very generic reponse from Barclaycard which didn't really say anything, but I feel they are being unfair to their customers and I definitely think they ought to use a different mailing service to at least give us a heads up when they make such a dramatic (undoubtedly automated) reduction.

Needless to say after a few phone calls last month I got the limit upped back up to £3500... I'm not arguing about £65 but I would like to have the option of making a big purchase on credit in the future.

Thanks

PasturesNew

This isn't about you, this is about the banks - and how much money they have to lend out to people.

This is about their changing rules and risks, because of what's gone on in the past two years. It's just it was your turn this month to have your limit changed.

It's not personal, it's the credit crunch.

never-in-doubt

Have a read here - specific thread for your query: Has your Credit Card limit been reduced?

willstewart

Really can't understand why they are out to annoy the hell out of long standing customers (not just Barclays) who are making them money whilst dishing out these 0% BT deals left right and centre from the look of things and these in the short term make them very little. A lot of people who qualify for these deals tend to shift credit around once a deal is due to end anyway so what's in it for them? They make less money, so smaller profits, so they then can't lend as much = job losses as staff aren't needed to deal with far less customers = less people able to use their products = less profit and so on until they go bust or whatever.

NickX

willstewart wrote: »

Really can't understand why they are out to annoy the hell out of long standing customers (not just Barclays) who are making them money whilst dishing out these 0% BT deals left right and centre from the look of things and these in the short term make them very little. A lot of people who qualify for these deals tend to shift credit around once a deal is due to end anyway so what's in it for them?

Whilst many people (stoozers and similarly astute customers) do settle debts within the promotional period, the vast majority do not, they forget and before they know it they are paying Barclaycard anything up to 21.9% APR. This definitely makes them a profit and brings in new customers ripe to have their hard earned funds extracted. If this was not the case, such promotional offers would have died out many years ago.

Reformed

I understand it's not personal - it's just plain wrong all the same when I'm not actually a risk to them... I probably have a couple of months when I don't clear the whole amount on the card so they do make money from me and they are practically throwing me to another credit card company by only giving me a £260 limit. £260 from £3565 is absolutely ridiculous!!

usignuolo

Barclaycard does not like people who pay off their cards in full each month. They have said so. They regard us as unprofitable.

jonesMUFCforever

usignuolo wrote: »

Barclaycard does not like people who pay off their cards in full each month. They have said so. They regard us as unprofitable.

OP doesn't pay the balance off though.

willstewart

NickX wrote: »

Whilst many people (stoozers and similarly astute customers) do settle debts within the promotional period, the vast majority do not, they forget and before they know it they are paying Barclaycard anything up to 21.9% APR. This definitely makes them a profit and brings in new customers ripe to have their hard earned funds extracted. If this was not the case, such promotional offers would have died out many years ago.

I look at things this way (figures probably not that exact as I haven't worked them out).

Someone has a Barclaycard with a £2000 outstanding balance and they pay say £60 interest a month (say around 30% APR).
Someone else does a £2000 BT to a Barclaycard with is 0% for 12 months and pays a 3% transfer fee of £60.

The first person only makes the minimum payment and over 12 months pays Barclaycard up to £720 with the £2000 balance remaining constant.
The second person makes the minimum payment of say £45 and over the 12 months pays Barclaycard £540, thus reducing the overall amount by over a 1/4.

So the first person has paid £720 whereas the second person has paid £540 and when interest is now put on the amount, has a monthly payment that is far less that the first person (say £42 a month if around 30% APR)

So why does that make people who pay a bad risk? They make far, far less out of people who balance transfer over the same period.

stclair

Reformed wrote: »

Last month my credit limit was reduced from £3565 to £260. It was reduced on the 30th July - I became aware of the reduction on the 3rd August when I logged on to my barclaycard online service. I thought it was a mistake! The letter informing me of the change in my limit was dated the 30th July but it did not get into my letter box until the 5th August.

I checked my credit report...spotless... I have also never defaulted on a minimum payment to Barclaycard - in fact all my payments are above the minimum, if I don't pay it off every month. I frequently spend £1,000+ a month on this card.

I think my limit was reduced as I am the main card holder but as I have not been working in the last 18 months I have no income as such - I am reliant on my partner as the sole breadwinner for the family. Anyway be that as it may I complained on three counts.

1. The way in which I was spoken to, as though the reduction was a direct result of me mismanaging my account or other financial products I might have (not paying etc...) rather than being a change in circumstance resulting from a credit reference agency - this was only explained by the fourth person I spoke to.

2. Having my credit limit reduced by 93%! That is a phenomenal reduction!!

3. Finally I complained that there must be other families in a similar situation who manage their spending through their credit cards and this could be problematic for them to have their limit reduced by such a lot and it was irresponsible to be using a mailing service to inform customers of this reduction that takes almost a week - they have our email and phone numbers - why can't they take a more direct approach.

Does anyone else agree with me? I've had a very generic reponse from Barclaycard which didn't really say anything, but I feel they are being unfair to their customers and I definitely think they ought to use a different mailing service to at least give us a heads up when they make such a dramatic (undoubtedly automated) reduction.

Needless to say after a few phone calls last month I got the limit upped back up to £3500... I'm not arguing about £65 but I would like to have the option of making a big purchase on credit in the future.

Thanks

On my housemates barclaycard statement.

Where it shows you the credit limit and available credit.

In Astericks next to the available balance it says.

This can be withdrawn or reduced at anytime.

Paulgonnabedebtfree

Basically they can do what they like so long as it doesn't conflict with their T & Cs or with any external rules imposed upon them. They can decide not to do business with you as you can decide not to do business with them.
I do agree that the CC companies are often handling it badly though. It was only by luck that I didn't get stranded in Spain when Goldfish (BEFORE Barclaycard took them over) reduced my limit from about 5 grand to £500 some time back. It caught me out at the time as up to then, companies only did such a thing if the account was misused. I got lucky. I had another card with me. Of course, now that I know this sort of thing is happening a lot, I would make other plans. But at the time this was a very unusual thing to happen.