Barclaycard lowered my credit limit suddenly...

gazchap

For about the last 9 months or so I've had a balance of £4,500 on my Barclaycard, with a credit limit of £4,850.

Over Christmas I came into a bit of money so paid off this balance (along with all of my other debts (of which the Barclaycard debt was about a quarter), so I'm now debt free!) and now they've reduced my credit limit to £260.

This is a bit annoying, as I was going to use the card for emergencies after closing the accounts of my other credit cards and cutting them up.

Is this a usual practice? Why would they lower the credit limit so drastically? I tried to request an increase to £1,500 through the website but it refused saying that I can't request an increase for 6 months.

co123456

Sounds about right. Barclaycard are limiting their esposure. Egg did this to me.

izools

Yeah most places have been doing this a while now, if you demonstrate an ability to use the whole limit responsibly, i.e. clear it to zero once or twice a year, fine.

If you however show that you can't afford it, by leaving the card at 90% of it's limit for 12 months hardly making a dent in the debt, they'll notice your debt stress and reduce your limit when they get the chance to limit their risk exposure.

Tough cheese I'm afraid, not your fault per se, just the way credit card companies run these days. MBNA did this with me many years ago. As did Barclaycard. Oh, and Halifax. And Abbey. Although having said that six months later I was bankrupt so they were obviously doing the right thing...

johnsons_baby

My grandad was a loyal Barclaycard customer and had a £4000 limit, he used it for small online purchases for protection, always paid it off in full every month.

Last year, he booked himself a holiday which was £260, he paid it off as soon as the statement came, next statement he had a £200 credit limit.

Being quite forward, he told them exactly what he thought of them before using this website for advice on the best card for purchases but not before the next day he was cold called by Barclays offering him a loan and he told them where they could stick that!

The only response he got was they were reducing risk inlight of the financial climate and it wasn't just him affected but he was just more annoyed by the fact he wasn't sent a letter first nor any reason for the sudden reduction on his statement.

Understandably you're miffed that they've taken the opportunity to decrease your limit but I think it is not so much as a result of what you may or may not have done but a reflection of the economic climate as a whole and they are just trying to reduce their risk but I can completely understand your feelings on this.

izools

And of course, MBNA are a good provider most likely to offer a nice chunky limit if you pass their scrutinous scoring system

ERICS_MUM

Unused overdraft limits obviously cost the banks money and at the moment while there are still liquidity issues they are not so able/willing to support them as they used to be. Loans help them hedge their positions more effectively. None of this helps you, but that's just the way it is...

southernguy_2

Izools

And of course, MBNA are a good provider most likely to offer a nice chunky limit if you pass their scrutinous scoring system

Is that correct i thought i read on here somewhere that they were quite lenient (or one of their cards was) i may be wrong of course

Might explain why i was recently turned down i only applied because i thought they were lenient.

gazchap

I did have an account with MBNA (£6,500 credit limit on there) which was one of the ones that was closed when I paid off the debts.

Reason being that they raised my interest rate from my "promotional rate" of 14.9% to 34.9% and refused to bring it back down. Their reason? I was late paying, except I wasn't - I'd set up the direct debit two months prior and had a confirmation letter from them and everything, but they just didn't process it. I didn't find this out until the following statement.

CannyJock

gazchap wrote: »

I tried to request an increase to £1,500 through the website but it refused saying that I can't request an increase for 6 months.

Try putting it in writing appealing the decision to reduce your limit in the first place - I did this successfully a while ago with LTSB when they reduced an unused £10k limit on my Amex Duo cards.