Citi card (ex-Shell) limit drop and rate hike

hasdogs

Had a Shell Citi card and stopped using it when the dropped the cash back. Should have closed it but didn't get round to it and a couple of days ago automatically got a Citi platinum card to replace it.

Today I get a letter telling me the credit limit has been lowered from £5000 to £1000 and interest rates hiked by about 25% for purchases and 40% for cash advances.

I don't care cos I'm not going to use the card and haven't paid credit card interest in more than 20 years. I know that doesn't make me a good customer but I don't understand why they (perhaps) suddenly think I am a worse risk.

Anyone else get a similar letter?

izools

If you haven't used the card in a long time or very rarely use it, they have very little (or none whatsoever) recent account conduct to rate you on.

As such, in their eyes, you are an unknown, ergo a high risk.

Had you used the card on a regular basis and / or demonstrated at least once a year that you can "afford" the £5,000 limit by spending close to the limit and paying it off within 6-12 months, they wouldn't have any reason to question your credit worthiness.

They are simply offsetting the risk of having an unknown on their books with a higher APR

flyingscotno1

I got the same letter.

I'm keeping the card rather than closing it, as it could be useful back-up but got one from Leeds Building Society (Barclaycard) for cashback of 0.5% , better than nothing and that will be my main one.

My limit was cut too, but no problem since flicking back through the bills I never got near my credit limit and my new one is still higher than I spent on the card, so I can't complain really.

Jigga

Yep, a letter for me today too. A loyal customer for three years rewarded by a limit dropped from £4k down to £1.5k and an interest hike from 26.9% to 31.9%.

I previously only paid off a proportion of the credit on a monthly basis when I originally had the card, but when they raised the rate from 16.9% to 26.9% about a year ago I somewhat went off the idea of continuing to do this.

Since I have kept this card debt free, I used it as my main spending card, but no more Citibank, you clearly don't want my custom.

Actions: Today I got the letter, 10 minutes later I cleared the balance online, in about 3 days when the money goes through, a letter cancelling the card will be sent.

Not far off the experience I had with Virgin a couple of years ago. The ending to that story was that I cancelled the Virgin card due to a 36.9% rate, gave it a year and then applied as a new customer. Currently with Virgin I am enjoying 15months of 0% on a balance of £4K and only have to pay back £25 per month.

It's a funny game this finance business isn't it?

snoringunicorn

Same letter for me in the post today (I've posted the full story on another thread.) Credit limit cut by 40 percent, interest rate hiked, and basically a *live with it* tone to the letter.

The only thing that is some consolation is that it looks like this is a general trawl - a lot of people are getting the same thing. This morning I did feel rather *picked on*.

Julie

Ritchie74

You can have an automated decrease for 2 main reasons;
1) if you are deemed high risk (based on how you have managed the debt on the card and/or based on monthly Credit Bureau feeds- eg low bureau score*, delinquent/ in default on other cards, over-indebted etc)
2) if you are not using the limit. Banks have to reserve money for limits they issue (whether used or not). They would rather lend the limit to somebody who needs/uses it. Hence keeping the reserves lower / making them more efficient.

*a different score to the one the public can buy directly (the one that most people seem to score 999 on)

hope this helps clarify,
Rich

hasdogs

Strange business. I used the card for about 24 months and spent £1100 on it in one of those months and over £900 in two more. A £1000 limit would not be adequate.

I have another card with a £14,500 limit which I last used in 2006 - lol. Until a couple of weeks ago when I cancelled it I had a Barclaycard (transfer from Morgan Stanley) which had a £7000 limit and hadn't been used ever. I currently use two cards with cashback and £4000 and £7500 limits.

The Citi card is crap compared to the Shell version it replaced so they should know they were likely to loose business with it. Don't know why they bothered to replace the Shell card, but, seeing as they did the last thing they needed to do is make it even less attractive.

pb3

You are in good company. I got the letter a couple of days ago, chopping my credit limit from £3900 to £1300 and upping the interest rate to a whopping 27.9% for purchases and balance transfers and 36.9% for for cash withdrawals:eek:

I use the card regularly but mainly for low volume PayPal purchases and I rarely spend over £200 monthly.

In way I wouldn't have minded if they drop the credit limit even further to say £250 as then I would use is as a replacement for my prepay The interest rates are neither here nor there as I pay the account off in full every month. They do seem to be rather usurious though - has loan-sharking been legalised?;)

[Shrug] They are within their rights to do this so I have no real complaint. The letter was clearly written and did not imply that I'd mismanaged the account. At least they didn't summarily close accounts like Egg did a while back.

techspec

I didn't get the limit decrease but got interest rate up 5% to 24.9% for purchaes and up 10% to 34.9% for cash advances.

Scandalous at a time of record low rates.

Rob_07

Hi,
Has anybody had any problems using the new platinum card I tried to use it for the first time today but it said incorrect pin so I've just rung them up and he said people have been ringing all day and they are aware of the problem apparently they haven't changed the PIN unless requested but the data hasn't been loaded onto the cards correctly but was told that can still use my old shell card and was given £5 compensation for any inconvienience.

But I haven't suffered a limit cut or an increase in the interst rate still at the 16.9% rate

Rob

snoringunicorn

Seems like a good old fashioned b*lls up all round!