MBNA lowered my credit limit by £7000!!!

JA1000

I recently paid off a significant sum from my MBNA, then checked it online - no letter, nothing but limit had gone from £7500 to £500. MBNA have continually lowered my limit, I have NEVER defaulted and always over paid.

I think there is an element of Treating Customers Unfairly, one look at your credit score and a key percentage is the amount of available credit against that used. Every time MBNA lowered the limit it had an impact.

Is anyone else who is a good creditor also getting this significant credit limits lowered.

Beast

It's not unfair, it's just a lender limiting their risk which they are completely entitled to do.

Its-A-New-Age-Thing

..............:rotfl:

JA1000

The impact is unfair, the constant blank cheques through the post offers of other card they sent me in the past, it was them who gave me the limit, I built up a good score which is still 939 for what it's worth but shouldn't they be limiting the risk on people who don't pay!! Why limit the risk now? They are the ones who gave me the limit and I didn't abuse it. Ironically I was a student at the time!! I think their risk assessment is a bit OTT. They were handy for 0% transfers but perhaps they are catching on to those that pay it off!!

A credit card with £500 is completely useless to me so I'll look elsewhere, the problem is MBNA are hidden behind so many cards.

Its-A-New-Age-Thing

TRY Flybe i know of 2 recent users that got a 5 k limit straight away, funded by sygma who also let u have as many sygma cards as u want and belive me theres PLENTY,

jed1_2

JA1000 wrote: »

The impact is unfair, the constant blank cheques through the post offers of other card they sent me in the past, it was them who gave me the limit, I built up a good score which is still 939 for what it's worth but shouldn't they be limiting the risk on people who don't pay!! Why limit the risk now? They are the ones who gave me the limit and I didn't abuse it. Ironically I was a student at the time!! I think their risk assessment is a bit OTT. They were handy for 0% transfers but perhaps they are catching on to those that pay it off!!

A credit card with £500 is completely useless to me so I'll look elsewhere, the problem is MBNA are hidden behind so many cards.

To be honest you probably unwittingly shot yourself in the foot by paying off a substantial amount in one go. I have read of numerous credit card companies doing this because once you pay a large amount they can then reduce their exposure to debt by preventing you from building a large balance on the card again.

It's annoying and people don't like it but you have to remember credit is not a right & they don't have to give you a large amount. You wont have been given a letter in advance because it's not good business sense, if they told you they were going to reduce it in theory you could go out and blow the whole lot before they reduce it.

A letter would have been generated after they reduced it. Move on and learn from it. If you have a large credit limit in future, don't pay of a substantial sum in one go & they will be less likely to reduce your limit.

xyellowx

look at it this way you lend sombody 7k for a period of time ,times become hard so circumstances change , you then get your 7k back out of the blue would you rel-end the 7k back out? No

This has been going on for the last 12-16months dont you watch the news?

JA1000

I think you are all missing a point, this isn't an issue it's more of a surprise, as someone who has ALWAYS met their obligations and stoozed. They can reduce their risk element, but I think they are doing it in the wrong place. I have another £50k available elsewhere so not concerned or bothered just surprised they they are hitting those who are reliable!!!

No doubt given a few months of spending onthe card and paying of in full, the limit will shoot up again as it did when I was a student.

Typical case of over reacting but it DOES impact on the credit score!

bengal-stripe

JA1000 wrote: »

I have another £50k available elsewhere so not concerned or bothered............Typical case of over reacting......

Aren't you the one who is doing the over reacting?

chattychappy

Banks are entitled to exercise commercial judgement and are required to lend responsibly. So they are entitled to look at your credit history and decide that they are over exposed or you are over-stretched. It wouldn't be possible for them to demand money back beyond the minimum, so after you've paid some back they take the opportunity to reduce your limit. It's not really taking something away from you - it's removing the option for you to borrow so much again from them in the future.

It is "potentially" unfair, depending how they have gone about their decision. Fairness initiatives, anti-discrimination rules means they don't have unfettered freedom - but you'd have an uphill struggle to establish they've acted improperly.

I had a 12K limit which had recently been increased from 11K. I'd never used more than about 3K. My overall credit situation was improving (amount owing reducing, no cash advances, not paying just the minimum on anything, no missed payments/defaults, rising income etc). Then got a terse letter - limit would be reduced to £500 and then the account closed once repaid. (The balance was zero anyway.) It was Natwest. So far I've not had this with anyone else.

I am concerned that, as in your case. these things can have knock-on effects. The effect of CRAs can be somewhat uncompetitive in my view - organisations that should be competing and forming their own opinions share data. Sure they make their own opinions based on that data - but increasingly they follow similar procedures. This is actually encouraged by the way regulations work - there is every disincentive to go out on a limb.

This sharing of customer data wouldn'thappen in most other industries. I would rather see only defaults/CCJ/bankruptcy type information shared. I think we have a system that is uncompetitive and encourages concerted practices.

But the consensus seems to be that this is in the public interest and I doubt anything will change soon.

izools

JA1000 wrote: »

I have another £50k available elsewhere

This is exactly why they reduced your limit.

This presents a much greater risk to lenders than someone who has £2,000 available elsewhere and misses one or two payments each year.

If push came to shove, Mr £2K would be able to afford all the debt if he maxed out his credit facilities.

You wouldn't.

So it's perfectly reasonable, sensible, fair, and justified that your creditors should start reducing your limits to a more sane level.