Can they do that?????

Celso

Hi Guys,

I have a credit card with Lloyds and it was on the red on £4000. After having success on a credit card PPI claim (with the incredible help of this website),I put the money towards that debit (£3000).
Checking my account online today I just realised that they reduced my limit from £4400 to £1300.
I had made a purchase this week of £60 and it shows now that I exceeded my card limit.
So, my previous limit was £4400 and now after paying £3000 they reduced my limit and still tell me I exceed my limit.
I have my name on a mortgage that is on arrears through Lloyds. the mortgage is on a house that my ex is leaving and paying for it now. Is that why they reduced my limit? Can they simply do that without giving me any notice?

Can anybody, please, advise me if I can do anything to have my limit back to how it was?

Thanks

Celso.

Kyresa

Nope. It is up to them what your credit limit is. They obviously think that you are a potential risk and so have reduced their risk as well.

Sorry this isn't the answer you wanted.

BugsyBrowne

Nothing you can do its their money and they can choose to change credit limits when they like.

Gromitt

So your limit was £4400
You paid off £3000
and then they reduced it to £1300 which was less than the card balance?

I don't think they can do that. I think they have to set it to at least equal to your card balance - they can't force you to receive overlimit charges.

Unless of course the £60 you spent on the card pushed you over the new limit they set which was your then balance.

fozmcfc

A couple of things

Yes they can reduce the limit anytime, but if they reduced the limit to below the balance, then that is wrong and you should complain about it. Your limit should have been reduced to above your new account balance.

I think it is clear from your post you are struggling, they see you are in a financial mess and are reducing the limit because they now see you as a bad risk. I would imagine if you were to make another lump sum payment to it, they will keep on reducing the limit. In the end if you keep spending on it, there is a very good chance, they will simply close the account and you won't be able to use the card and you will need to pay it off at the current APR.

Secondly though, as you are struggling with money/debt, why are you still spending on the card. It looks very much as though, you will simply run the balance up to £4k again and just add to your money worries.

Celso

fozmcfc wrote: »

A couple of things

Yes they can reduce the limit anytime, but if they reduced the limit to below the balance, then that is wrong and you should complain about it. Your limit should have been reduced to above your new account balance.

I think it is clear from your post you are struggling, they see you are in a financial mess and are reducing the limit because they now see you as a bad risk. I would imagine if you were to make another lump sum payment to it, they will keep on reducing the limit. In the end if you keep spending on it, there is a very good chance, they will simply close the account and you won't be able to use the card and you will need to pay it off at the current APR.

Secondly though, as you are struggling with money/debt, why are you still spending on the card. It looks very much as though, you will simply run the balance up to £4k again and just add to your money worries.

thanks for the reply.
for more than three years I have being paying it regularly and never missed a single payment but as it was so much, the money i was paying was just covering the interests.
The whole debit on the credit card was a bad idea pussed by my ex. I never had any money problem apart from the mortgage arrears that was all on the evil ex drama.

Do you think would it be a good think to give them a ring and ask if they are going to keep reducing my limit?

Thanks ever so much for the tips.

Celso

thenudeone

Celso wrote: »

Do you think would it be a good think to give them a ring and ask if they are going to keep reducing my limit?

I don't think they know, and even if they did, telling you in advance would defeat the object, because you could just spend the spare limit soon as the balance reduced.

Sometimes it's difficult to see the logic to card issuers' decisions.

I have an excellent payment history but high credit balances (all at 0%). I have a rarely used CapitalOne card with £5k limit, zero balance.
I applied for their special offer cashback card and was declined, even on appeal and even when I suggest a reduction in the existing card's limit to free up some for the new card; but the existing card's limit remains unchanged at £5k!

In your case, however, the you've been paying the minimum balance balance for a long time so their assessment is that you are now a more risky customer. But they should never reduce your limit to below what your existing balance is - if they have, that should be challenged as far as necessary to get it reversed. As long as you have kept to all the terms, you should always be allowed to pay off the balance in line with the normal payment terms if you want; to demand earlier repayment or to charge you for exceeding the lower limit in this circumstance is a breach of the terms.

fozmcfc

If I've understood right, they cut your limit to £1300 from £4400 after you made a £3000 payment to them, thus given you a balance of £1400, but a limit of £1300, that is wrong of them. The limit should have been reduced to no lower than £1500 IMO.

I would say it would be acceptable for you to ask for the limit to be above your current balance and any over limit charges incurred by the limit cut to be refunded.

You could ask about raising the limit back to what it was or if they are going to keep reducing it, but I think the answer will be no to raising and I doubt they will inform you that they will be reducing the limit each time you reduce the balance.

Ultimately I think you need a £1500 limit and to make a payment to ensure that when your next statement comes in you aren't over it. Then start clearing down the balance as quickly as you can.

Tixy

Was the credit card reclaim for this card? If so its not uncommon for a card provider to reduce the limit to just above your new balance in those circumstances.

Was it the new purchase of £60 that took you over your new limit? or did they reduce your limit to an amount below your outstanding balance (on the day it was reduced)? - this makes a difference.

Are you able to make a payment now to get it back under your new limit (and leave enough space for interest to be added on)? - if so then might be worth a phone call and explaining the situation and seeing if they will agree not to charge an overlimit fee as you've paid it back as soon as you became aware of it.

Celso

fozmcfc wrote: »

If I've understood right, they cut your limit to £1300 from £4400 after you made a £3000 payment to them, thus given you a balance of £1400, but a limit of £1300, that is wrong of them. The limit should have been reduced to no lower than £1500 IMO.

I would say it would be acceptable for you to ask for the limit to be above your current balance and any over limit charges incurred by the limit cut to be refunded.

You could ask about raising the limit back to what it was or if they are going to keep reducing it, but I think the answer will be no to raising and I doubt they will inform you that they will be reducing the limit each time you reduce the balance.

Ultimately I think you need a £1500 limit and to make a payment to ensure that when your next statement comes in you aren't over it. Then start clearing down the balance as quickly as you can.

Thank you very much for all the help.i will give them a ring on monday and see how things go.

Celso

Celso

Tixy wrote: »

Was the credit card reclaim for this card? If so its not uncommon for a card provider to reduce the limit to just above your new balance in those circumstances.

Was it the new purchase of £60 that took you over your new limit? or did they reduce your limit to an amount below your outstanding balance (on the day it was reduced)? - this makes a difference.

Are you able to make a payment now to get it back under your new limit (and leave enough space for interest to be added on)? - if so then might be worth a phone call and explaining the situation and seeing if they will agree not to charge an overlimit fee as you've paid it back as soon as you became aware of it.

Yes, the credit card claim was on this one. and yes the new purchase put me on over the limit. the thing is, they never mention that the limit would be brought down so the last time I checked my credit card I was still on the £4400 limit with the £3000 paid on it so thats why I used it. I made a payment today so the i'm on my limit now.

I will give them a ring on monday to clarify what was going on but I reckon they will say "because that is the way it is". will see

Thank you very much for all the advice.

Celso