Credit Limit Halved - What do I do

Paul_Herring

property.advert wrote:

Messing about with £500 on a 7k is going to do nothing.

If you're getting 7K limits, then I don't really think there's a problem with your credit score.

Daisy_Duck

property.advert wrote: »

My experience from over 30 cards over a 15 year period does not back up some speculation here. Without fail, the quickest way to increase a credit limit was to have a balance which you did not pay fully but certainly made at least the minimum repayment.

Mmm... I think it is fair to say though that we are living in unusual financial times... things now are not necessarily the same as they've been over the past 15 years.
I would speculate that raising credit limits of people not paying off cards, having their limits raised, then finding themselves in an unmanageable amount of debt has contributed to the current state of affairs.
That said I would imagine that lenders are now rethinking what you say is "without fail the quickest way to increase a credit limit."

Just another point of view...

bengal-stripe

izools wrote: »

Barclaycard reduced my card limit from £2,000 to £750..........said "I'll Leave if you don't up the limit back to what it was" and they refused point blank..........It was written into a bankruptcy order six months later

Barclaycard obviously had a very good reason to reduce your limit.

If any CC reduces a limit, there usually is a good reason.

izools

bengal-stripe wrote: »

Barclaycard obviously had a very good reason to reduce your limit.

If any CC reduces a limit, there usually is a good reason.

Quite right, I most certainly was at the time under debt stress, but what I don't understand is how Barclaycard could have known.

I never did anything wrong with my Barclaycard account. Frequently spent up to the limit, frequently brought the balance down to £0. Paid on time over & above the minimum, within limits, blah blah they couldn't have asked for a better customer.

In fact I think my behaviour on the account was in line with chappies "best way to be in line for a credit limit increase"... Barclaycard were obviously well ahead of the game in my case but I'm lost as to what they based their decision on...

It's not like I left the balance at 90% of the credit limit, paying of and spending 10% of the limit all the time!

lauriepops

They probably reviewed your credit report and saw your "debt stress" from there

Moggles_2

nickmack wrote: »

Creditors generally look for a the best combination of low risk and high profit for their customers. Upon consulting your credit report, it's quite possible part of their scoring criteria would take into consideration those who do not repay in full each month and leave a perpetual balance, as being one of the most profitable.

Originally Posted by property.advert
My experience from over 30 cards over a 15 year period does not back up some speculation here. Without fail, the quickest way to increase a credit limit was to have a balance which you did not pay fully but certainly made at least the minimum repayment. The absolute quickest way was to quickly introduce (not transfer) a large balance and then proceed to make the minimum payments but also clear the total debt within two or three months.

I think you've endowed the banks' software with more intelligence than it actually possesses.

Certainly, potential lenders as recently as 12 months ago, would not have been able to detect the difference between a rolling balance built up through making minimum payments for 2-3 months and that of a big spender that settled the statement balance each month. They would know only that you paid at least the minimum required on time each month.

That said, some lenders are beginning to report additional info' to the CRAs. At this early stage, they may not have built up sufficient history to draw conclusions about their customers' behaviour, but obviously this is something we need to take into account in future.

More info' here:
http://experian.metafaq.com/resource...ed_Aug09V4.pdf (pages 16-17)

izools

lauriepops wrote: »

They probably reviewed your credit report and saw your "debt stress" from there

But Barclaycard never performed any credit searches, equiries, unrecorded enquiries, of any kind, with any of the CRA's other than their original account opening search when I applied for the card.

Can they "Review" my credit file without even leaving a soft footprint?

It's an interesting point this, as my OH who has a Lloyds TSB account keeps being turned down for an Overdraft due to "adverse credit" despite having never incurred a peny in charges on the account, and Lloyds TSB having never performed any kind of search on his credit report other than two years ago when the account was first opened. How could they know what his public credit score is like now without giving it a search?

DD4

enigma368 wrote: »

Sigh...With respect, please at least read the initial post of a thread, rather than going on a tirade based only on the thread title. If you had read my post, you would have realised my problem has nothing to do with me needing credit, but rather to do with me wanting to build up a respecable credit history in the UK. As I said in my post, if you had bothered to read it, I could cancel the card, I dont need the credit, I just want a good credit rating for when I do need credit.

Anyway I don't think the reduced limit is going to harm me too much (how do they know I didnt ask for it to be reduced), so I will leave it.

Sorry, but you must live in a different world from me, I'd never even consider running credit just to increase my credit score. What's the point?

If you start actually using the increased credit, then you're back to my original post where I said you should try and live within your means instead of relying on credit.

If you're doing it for the kudos amongst your mates to be able to say you've got £10k of credit at your disposal, then I think you need to ask yourself some deep questions. You also need to realise that Credit is not Wealth.

If you're doing this to make it easier to get a mortgage, they're much more interested in ablility to pay, income and outgoings, deposit size, security of job, etc. than how much you're allowed to max out on your credit cards.

If you're doing this for any other reason, other than being able to get access to a lot of credit (then see my original post about living within your means), then please do tell.

NickX

DD4 wrote: »

Sorry, but you must live in a different world from me, I'd never even consider running credit just to increase my credit score. What's the point?

I'm hope I am not going to come over offensive but I think it is you that must be in a different world.

It is an excellent idea to run a credit card to increase your credit score. Successfully managed credit accounts mean your creditworthiness increases and you get access to better and more profitable deals.

As a stoozer, it is only because I have previously run accounts well to get an excellent credit history, that I can now make money on the funds lent to me by the Card Providers.

I think you maybe confusing "running credit" with "running up debt". These are 2 separate things. Running successful credit accounts can enhance your life without ever getting into any "real" debt.

I agree that running up debts that you may not be able to repay cost effectively is not adviseable.

enigma368

Sorry, but you must live in a different world from me, I'd never even consider running credit just to increase my credit score. What's the point?

If you start actually using the increased credit, then you're back to my original post where I said you should try and live within your means instead of relying on credit.

I'm doing it so that I can have credit available to me through loans or credit cards(at the most favourable rates possible) when I need it, for short or long term borrowing. There is NOTHING wrong with borrowing money you can afford to pay back.

I also want to be able to get reward credit cards so that I can benefit from things such as air miles from my purchases. If you have no interest in doing the same, then fair enough, but I do.

For the record, I have a decent salary and I pay off all my credit cards in full every month without paying any interest.