Bank has reduced my Credit Card limit

emma1983_2

paulmcerlean wrote: »

Not really, as they wouldn't reduce it to a figure lower than the balance you have.

Not necessarily true, £843.02 was in my account (£6.98 less than the new credit limit) - there could've been transactions which were yet to be finalised which could've bumped my balance above the credit limit so then I would've been penalised for this.

Tixy

emma1983 wrote: »

KingElvis - That's not the point though, is it?! Even if I did use the full original credit limit then had to transfer the money onto a new credit card because Halifax reduced my credit limit I would have to pay a fee to transfer this money which would've defeated the object of using a credit card instead of a loan. I know credit card companies have the right to change customers' credit limits at any time but in a lot of cases this is really inconsiderate to the customer and can impose financial problems onto their customers which is not right.

If you had tried to do the transfer before being told of the reduction in limit they would either have declined it - and then told you about the reduction to your credit limit - or would have allowed the transfer and then kept your limit higher.

When the banks look to reduce their debt exposure on certain accounts I'm not sure that being considerate to customers is their main focus, they are simply acting as a business. They were not to know you intend to make a transfer. Reducing your limit wouldn't by itself impose financial problems on you.

emma1983_2

Tixy wrote: »

If you had tried to do the transfer before being told of the reduction in limit they would either have declined it - and then told you about the reduction to your credit limit - or would have allowed the transfer and then kept your limit higher.

When the banks look to reduce their debt exposure on certain accounts I'm not sure that being considerate to customers is their main focus, they are simply acting as a business. They were not to know you intend to make a transfer. Reducing your limit wouldn't by itself impose financial problems on you.

Eh? I had no reason to do a balance transfer before receiving notification that my credit limit had been reduced.

I think you've misread my messages...

ElmerFudd

emma1983 wrote: »

paulmcerlean wrote: »

Not really, as they wouldn't reduce it to a figure lower than the balance you have.

Not necessarily true, £843.02 was in my account (£6.98 less than the new credit limit) - there could've been transactions which were yet to be finalised which could've bumped my balance above the credit limit so then I would've been penalised for this.

One of my credit card companies did this to me (reducing the limit by £350 I think). Fortunately I had funds available to put into the account to cover what was being paid. They claimed I hadn't used the account in 6 months (which was a lie) and had just been paying minimum payments (which was true). This one will be the first one I close once I have my bad CC out of the way.

Tixy

emma1983 wrote: »

Eh? I had no reason to do a balance transfer before receiving notification that my credit limit had been reduced.

I think you've misread my messages...

You said you had been thinking of buying a car with the remaining credit - I had thought you meant by balance transfer but guess now you probably meant by purchasing it on the card.

The rest of the advice stands though - had you made the purchase then either it would have been refused because your limit had been reduced or it would have gone through and your limit would not have been reduced.

What card companies do is tend to take opportunities when they can to reduce certain people's limits down to just above their current balance. Not because they want you to go over and incur fees, but because they don't want you to spend further and ultimately don't want you as a long term customer.

emma1983_2

Whether or not the banks would want me to spend over the credit limit (banks not wanting me to give them money for penalty charges - hmmm....), the fact still remains that I could've had transactions waiting to come through which would've bumped the balance up above the credit limit OR the transactions might have been cancelled which would've been an inconvenience to me and unnecessary (in my point of view). What's the point of having a credit card, receiving an agreement from the bank that this is what you can spend on it and then the banks almost immediately slashing the credit limit by over 50% whenever they feel like it. To me now, the only good thing about credit cards is the ones with freebies. I'm better off just using my debit card.

thenudeone

emma1983 wrote: »

the fact still remains that I could've had transactions waiting to come through which would've bumped the balance up above the credit limit [/FONT][/COLOR]

If the transactions had taken place before you had made aware of the lower limit, you would have a very strong case for refunding any charges or penalties and reversing any poor credit reference information.

emma1983 wrote: »

What's the point of having a credit card, receiving an agreement from the bank that this is what you can spend on it and then the banks almost immediately slashing the credit limit by over 50% whenever they feel like it.[/FONT][/COLOR]

Agree to a certain extent. If any other company (for example your telephone company) decided to prevented a customer from using its agreed services, without giving any notice, it would almost certainly be deemed unfair by the courts, but banks seem to be able to use the "responsible lender" card to get away with doing exactly the same.
I'd love to see this practice challenged in court.
I'm just waiting for a solicitor, judge, or MP to be stranded abroad because he or she can't buy air tickets home because the bank has reduced the limit without notice "as a responsible lender".

m00m00

I once had one of my credit limits reduced (hbos) while I still had a 'pending transaction'

so I made the transaction with X Limit, and by the time they had put it on the system the limit was Y and my balance over this (large transaction)

they charged me the £12 default fee, but after 5 minutes on the phone to them, got this removed, no adverse information entered with the CRAs

Moneymash

paulmcerlean wrote: »

Not really, as they wouldn't reduce it to a figure lower than the balance you have.

Sounds like they are looking shot of you if they have reduced you down to your balance.

Paul, this is exactly what happened to me Barclay card lowered my credit limit to below my outstanding balance! I was struggling to make regular minimum payments but I was still under my original credit limit. So although they knew I was struggling, they reduced my credit limit and then charged me over limit fees, of £16.00 per statement! Some months later I am still over my credit limit.

grizzly1911

As well as being "responsible lenders" (now they haven't got the money) the other reason is that they have to maintain so much capital (which costs them money) as a percentage of money they lend out. Obviously they charge you something and therefore make a profit on the difference.

It also used to be the case that they had to also keep a lower percentage of capital against unutilised limits. In this case it costs them money but at the same time they are not making any money from you. If you multiply that by 1000s of customers it has an affect on them and in these tough times they need to cut costs.

Banks are not in it for our benefit if they aren't maximising the take from you then they are not interested. Unfortunately if you are in debt you are easier to target.

Big business customers have to pay a fee if they want Overdraft Limits that they don't fully use.