Decreased Credit Limit with AmEx

Monners_2

twice in the past 12 months my credit limit has been decreased from 1900 to 1300 then just to 800. I asked why and got the usual "we are a responsible lender" rubbish.

Never missed a payment, never gone over or anywhere near my credit limit got an average credit rating, havent applied for more credit etc.


so why have they done this??

Innocent_Guy

Hi Monners, although you may have stuck to your side of the terms and conditions if you do not utilize your full credit limit the lender will/can reduce your credit limit as they see fit. If you start to use your card more and get closer to the limit they may start to increase it again. Ensure that you don't EVER go over :-)

LeeSouthEast

What Innocent_Guy said: If you're average balance over 12 months is around £800, that's what they will eventually reduce you to.

97trophy

its not about you Monners - you have done nothing wrong. This is all about the banks trying to reduce their exposure.

Monners_2

Ok thanks for the replies, but they also only gave me 4 days notice. Anyway ive just paid off my balance and they can stick their card where plastic melts.

izools

LOL fair enough although you'll find more and more lenders doing this.

A lender only has a certain amount of money in the pot they can lend at any given time, and if "Wholesale Money" isn't as readily available as it once was, and they have more customers defaulting, the pot shrinks.

Obviously a customer with a £2,500 credit limit on their account will have £2,500 reserved from the lending pot at all times, which the lender can't lend to anyone else. But if that customer never borrows more than £1,000 at any given time, the lender will reduce the limit of that customer, and put it back in the pot for someone else to borrow, who may borrow and repay more than you.

It's simple really when you think about it

TFD_2

Monners wrote: »

Ok thanks for the replies, but they also only gave me 4 days notice. Anyway ive just paid off my balance and they can stick their card where plastic melts.

The way things are going, if you tell every lender who cuts the credit limit to stick their card, you're likely to end up with very few cards...

Unfortunately it's common practice now from most issuers.

Monners_2

TFD wrote: »

The way things are going, if you tell every lender who cuts the credit limit to stick their card, you're likely to end up with very few cards...

Unfortunately it's common practice now from most issuers.

thats the only way these companies will listen if you go somewhere else and they earn nowt from you

izools

Then they will use the money they were lending to you, to lend to someone with different spending habits, who may leave a balance on their card month to month, max it out occasionally, and repay it in full occasionally.

Credit card companies are becoming more and more specific in the type of customer they want and will accept unfortunately

loopy.magic

Don't take it personally, you're just not making them enough money for them to offer you the upper limit . Exact same thing happened to me when I had an Amex card.

If you haven't told them to stick the card just yet then you might want to consider keeping it, Amex do have one of the best if not the best customer services out of all credit card companies (especially now, reduced access to credit seems related to diminishing customer service). And as mentioned if you start to use the card more then it's very likely your limit will go back up.

byebyedebt

No, no no. Amex are reducing limits again on their cards. Its not always about not utilising limits. If it was they would raise it. Im in the same situation, credit limit cut in half. Discovered as I checked my account today prior to spending 3K. Would they raise it, oh no. Not without submitting bank statements and pay slips etc. Im going to clear the balance and move away.