Credit limit reduced by £3000 without warning!

pauli

Hi, I went to use my Barclaycard Visa in the supermarket last night and it was declined. I thought this was odd as I should have had £3000 of available credit available. When I got home a statement had arrived in the post that morning and it said 'your new credit limit is £500' (It was £3500 beforehand) - I couldn't believe it so I rag them up and they said it's part of their responsible lending policy and it will either be due to my spending patterns (which haven't changed at all recently) information from external credit reference agencies (which it can't be as I've not had any problems with late payments of credit and it was fine when I last checked my record) or due to conduct of my account (I genuinely forgot to pay once last November the first time in nearly 9 years but I can't see it being that) ans I always pay more than the minimum payment but never in full, so I thought I was their ideal customer!

The only thing I did do last month, was ring and ask if they could reduce the interest rate on the outstanding balance, which they refused to so I transferred it to another card at a lower life of balance rate - I am sure this is why they have lowered my limit by such a huge amount.

I am really angry as I feel this is like a black mark against me and will affect my credit rating - has anyone else had this problem and is there anything I can do?

Thanks.

crazyfj

I would'nt worry about it, if you search the forum you will see a lot of people with Skycard or Barclaycard have had the same done to them.

http://forums.moneysavingexpert.com/showthread.html?t=370248&highlight=reduced+credit+limit

http://forums.moneysavingexpert.com/showthread.html?t=357863&highlight=reduced+credit+limit

just seems to be there way without giving anyone a real answer why,

fj

jamalfatty

If anything, this would improve your credit worthiness, your circumstances havent changed as you mentioned, but you now have £3k less available credit to you, so thats £3k another company might lend you that they wouldnt before.

Do you use the credit card for cash withdrawals / gambling at all? If so, and frequently, this would be the likely reason for the decrease.

If not, are you sure your credit file is as good as you say? Might be worth obtaining an up to date copy to check

1882

Even Barclays chief executive Matt Barrett admitted that he doesn't borrow on credit cards because they're far too expensive

Read the story here!

Repent wicked debtor

Very odd they'd do it without warning - is that legal?

jamalfatty

1882 wrote:

is that legal?

that old chestnut again

Of course it is legal, no one has a given right to have a credit facility, the company will lend what it is confident will be paid back. If they decide they dont want to lend you as much money as before, then thats up to them!

TAG

pauli wrote:

The only thing I did do last month, was ring and ask if they could reduce the interest rate on the outstanding balance, which they refused to so I transferred it to another card at a lower life of balance rate - I am sure this is why they have lowered my limit by such a huge amount.

This happen to DH with Barclaycard. He did a balance transfer to a 0% and they slashed his limit from £6100 to £1400. Responsible lending blah blah blah!!

ChequeredFlag

A similar experience happened to me and DH recently. We had been making monthly payments on Barclaycards and were in a position to clear outstanding balance last December. Once DH cleared his balance off, his limit available was £1700, he started to pay for petrol during the month etc., with the intension of clearing at the monthly statement date. However, after a week or so his card was declined in the garage and it transpired that Barclaycard had reduced his credit limit to £260, with no notice at all. A letter came a week later to inform him.:mad:
As I had also cleared my account in December, I was ‘prepared’ and sure enough Barclays did it to me too! No warning or notice – but a letter some time later, somewhat frustrating when you’ve been trying to pay for goods with your card the previous week!

1882

jamalfatty wrote:

that old chestnut again

Of course it is legal,

My Tesco Card terms & conditions state "we will give you at least 30 days written notice".

Surely to reduce the limit without notice would break such a condition?

TAG

Morgan Stanley did the same as well. Reduced the limit first from £3000 to £1030 without telling us. Then sent the letter a week later. Again after a balance transfer.

jamalfatty

1882 wrote:

My Tesco Card terms & conditions state "we will give you at least 30 days written notice".

Surely to reduce the limit without notice would break such a condition?

Reducing the limit will not be subject to any notice period for any financial product anywhere - as an example, if you had a credit card with £10,000 available credit left, and you called them to tell them you cant afford to pay the balance already on there, do you think they are going to give you 30 days to blow the other £10k when you cant afford to pay back what you already owe?

mister_bojangles

Many banks are protecting themselves against fraud, hence the current vogue of reducing limits. Thankfully, Lloyds TSB informed me that they have reduced my £4000 limit to £1000 because they had noticed that I had not been using it. They reduced it before informing me. It was ok by me becos I had not been using it anyway. Perhaps the trend re: use of credit cards will soon become that of phoning your credit card company before you make a purchase to know that you have enough funds. It's silly, really.