Credit Limit Reduction... Closed my account

thenudeone

We will probably have to disagree on this one in the absence of a court ruling. But the provision of a credit card facility IS the contract. Payment for services provided in the past is a separate issue IMO. Removing credit facilities and possibly stranding someone abroad is not “responsible”!

chattychappy

thenudeone wrote: »

WBut the provision of a credit card facility IS the contract.

I would say that providing the card and the facility for ongoing spending is only part of performing the contract. In this situation, the contract isn't terminated - the credit limit is reduced which stops further borrowing, but allows existing borrowing to continue. So the contract is very much still in force until this is repaid. The contract (in this context) is an agreement by which a consumer has a revolving credit facility with a variable limit. Spending, cash advance, interest, charges and payments all impact on this.

thenudeone wrote: »

Payment for services provided in the past is a separate issue IMO.

I don't think it is. The cardholder is pays interest for existing borrowing, as I say it's an ongoing relationship. Granted you may not be able to use the card anymore until you've paid down the debt. But even then, if you do pay it down and the credit limit hasn't be altered again, you could still make further purchases. I see the contract as very much alive.

thenudeone wrote: »

Removing credit facilities and possibly stranding someone abroad is not “responsible”!

Agreed - it might not be responsible. But that would be a different test and one not under the regs. The test is whether the term itself is fair - not how it is used by the lender.

thenudeone wrote: »

We will probably have to disagree on this one in the absence of a court ruling.

Yep, I think we do! But I enjoy this kind of debate and hope you do too.

oldtup

Fact is that credit scoring is very arbitrary.

I've never been as financially secure as I am now. In the past I've taken business risks and been in some dodgy predicaments. However I'm now deemed a bad risk whereas I used to have no problem getting cards with high limits.
Doesn't bother me as I now have far more credit available than I need, but it just shows that there is a category of customer that doesn't do well on the computerised scoring systems.
If you are self employed, have high value assets and a large amount of savings then you are a good credit risk, but you won't show up as such!

Do what I did when I was one of the EGG customers who had the card cancelled. Cut it into small pieces, flush it down the toilet and never do business with them ever again. And wait to watch then disintegrate just as EGG did! Every firm who has treated me really badly has ended up in trouble, chickens really do come home to roost!!!!

NeverAgain_2

I have a Halifax card with a limit of about £5K which I've not used for several months.

Letter arrived in the week from Halifax saying they are going to reduce the limit to £2,000, although it says I can ask for a review of that decision.

Seems sensible to me.