Bank has reduced my Credit Card limit

emma1983_2

Moneymash wrote: »

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.

This is exactly what I mean and there's nothing 'responsible' about it. Some months back I was reading the credit cards/loans section on this site and it was basically saying that instead of a loan consider getting a 0% interest credit card and pay off the amount borrowed before the 0% interest expires - no offence to Martin Lewis and his team because they do an excellent job but maybe this isn't good advice considering banks can slash credit limits whenever they please so using a credit card as a free loan isn't really an option as it can be risky and so you can be left in the same situation as Moneymash.

emma1983_2

grizzly1911 wrote: »

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.QUOTE]

Oh... Banks haven't got the money - my heart bleeds!!! No, they've got the taxpayers' money oh and they give themselves huge bonuses every year even in this recession. grizzly1911, financially I think the banks are doing just fine.

pearls_of_wisdom

opinions4u wrote: »

Yes they can do this.

If you're not happy, take your business elsewhere.

what's your secret to get a credit line of £78,400 i assume your earning well in excess of £100,000 and if you have never paid any interest why do you think you've never had credit limit reductions

NeverEnough

pearls_of_wisdom wrote: »

what's your secret to get a credit line of £78,400 i assume your earning well in excess of £100,000 and if you have never paid any interest why do you think you've never had credit limit reductions

It would be most interesting to know that, I agree......
I have just had First Direct reduce limits for no rhyme or reason after a 10 year relationship - current account (with a tiny OD limit of £500) and credit card with a modest limit (4K). Always up to date. Never a problem with payments, to them or anyone else. Primary account with Barclays, no issues. High Earner (well over £100K) but no credit line anywhere near £78 400...........:eek:

[Deleted User]

A lot of limits in the past were higher. Mine are in the same region as O4U's, and have been essentially built up by presenting zero risk to the lenders. Keeping them all ticking along, always making full payments, never getting anywhere close to maxing out, no cash withdrawals, but still putting a decent amount throught the cards. Don't have anything on your file elsewhere that will give cause for concern. All lenders want some full payers on their books so as to minimise the overall risk, and they still get merchant fees. Limit reductions are generally applied first to the riskier populations.

Much more difficult to do now though when initial limitis are lower, increases more uncommon and reductions more common.

pearls_of_wisdom

Deleted_User wrote: »

A lot of limits in the past were higher. Mine are in the same region as O4U's, and have been essentially built up by presenting zero risk to the lenders. Keeping them all ticking along, always making full payments, never getting anywhere close to maxing out, no cash withdrawals, but still putting a decent amount throught the cards. Don't have anything on your file elsewhere that will give cause for concern. All lenders want some full payers on their books so as to minimise the overall risk, and they still get merchant fees. Limit reductions are generally applied first to the riskier populations.

Much more difficult to do now though when initial limitis are lower, increases more uncommon and reductions more common.

Very well explained if you don't mind me asking zx81 1 .to get to approx £78,000 credit line are you talking 10 x credit cards at £7800 or loans secured/unsecured 2.what do you class in terms of decent % putting through your card each month and then paying in full my understanding from this site is 15/20% do you agree ? 3.Self employed,no debt,1 x c.c, start of credit building in your opinion as a general rule how long to build up a credit line of say £15,000 your best guess would be much appreciated many thanks

norabatty_2

Same happened to me a few years back. One bank put loads of extra charges on my CC (interest for taking money out of an ATM that was done fraudulently - amounts were reimbursed, but continued to charge interest on those amounts), I refused to pay, went down as default payments on my credit file. Next thing I know, I get a letter from Halifax (in no way financially associated with my offending CC provider), reducing my credit limit from £4000 to £500 with immediate effect. I went online to discover my balance was sitting at £550, complete with charge for going over my limit. I rang them up and gave out, they removed the charge but told me to put in enough money to get my balance below £500. I asked why they reduced it and they said I was now deemed "higher risk". They had no interest in hearing my side of things. Needless to say, I paid off the full amount and closed the account. The funny thing is, they constantly send me junk mail trying to sell me a credit card They would have to pay me alot of money before I would reconsider going back to them.

Anyway, 2 years and various dealings with the Financial Ombuddsman later, my credit file was finally corrected and I was given compensation from the original offending CC provider.

pearls_of_wisdom

zx81 any chance i could have your opinion on post 27 from yesterday would be much appreciated many thanks

[Deleted User]

pearls_of_wisdom wrote: »

Very well explained if you don't mind me asking zx81 1 .to get to approx £78,000 credit line are you talking 10 x credit cards at £7800 or loans secured/unsecured 2.what do you class in terms of decent % putting through your card each month and then paying in full my understanding from this site is 15/20% do you agree ? 3.Self employed,no debt,1 x c.c, start of credit building in your opinion as a general rule how long to build up a credit line of say £15,000 your best guess would be much appreciated many thanks

Difficult to answer most of that, but -

1 That sort of line is spread over 5 cards. But as I say, they're predominantly from a few years back, althogh one is only 2 years old.

2 By putting through a decent amount, I mean that all my spending (where possible) goes through a card. A big chunk through Amex, then I alternate between a couple of others where Amex is not accepted.

So most of the cards are getting a sizeable amount going through each year, more than enough to stop them falling into low usage categries that might want lenders to cut limits or cancel them. Although I wouldn't be overly concerned if they did. I just happen to have high limits - I didn't actively set out to get them and I'm not treating it as a competition to keep them. But it is comforting to know I've got the ability to deal with just about any emergency under the sun if it came to it.

3. Almost impossible to answer. Certainly depends on your income. You'll probably need around £30k to be able to get £15k credit - although my ratios are very different, but again due to being from a very diffferent time. But assuming you could acquire a new card every 6 months, £3-4k limit a time.... 2-3 years?

But then again you could get a £12k card tomorrow, or never get given another after your first two at £3k each because you don't spend anywhere near the limits.

Not sure any of that helps, but let's hope it does...!

pearls_of_wisdom

Deleted_User wrote: »

Difficult to answer most of that, but -

1 That sort of line is spread over 5 cards. But as I say, they're predominantly from a few years back, althogh one is only 2 years old.

2 By putting through a decent amount, I mean that all my spending (where possible) goes through a card. A big chunk through Amex, then I alternate between a couple of others where Amex is not accepted.

So most of the cards are getting a sizeable amount going through each year, more than enough to stop them falling into low usage categries that might want lenders to cut limits or cancel them. Although I wouldn't be overly concerned if they did. I just happen to have high limits - I didn't actively set out to get them and I'm not treating it as a competition to keep them. But it is comforting to know I've got the ability to deal with just about any emergency under the sun if it came to it.

3. Almost impossible to answer. Certainly depends on your income. You'll probably need around £30k to be able to get £15k credit - although my ratios are very different, but again due to being from a very diffferent time. But assuming you could acquire a new card every 6 months, £3-4k limit a time.... 2-3 years?

But then again you could get a £12k card tomorrow, or never get given another after your first two at £3k each because you don't spend anywhere near the limits.

Not sure any of that helps, but let's hope it does...!

thankyou for taking the time and trouble to answer points if i understand you correctly on point 2 would you class 15/20% of available credit use as potentially low use as i thought that level of use was a big plus as it demonstrated you could handle credit and you weren't on the breadline,obviously i've a long way to go but still remain a little unsure what the best stratergy is ?