MBA card can't decrease the limit ?

Fae

I have a credit card with MBNA, they wanted to increase the interest rate so I declined this and am currently paying it off. (along with the rest of my debt).

I rang them to ask them to decrease my credit limit, as I'm hoping in a few months time to try for a balance transfer card, and my understanding is even if you are not using the available credit it can go against you when applying for more.

I was told that as the card is closed to any new spending I can't decrease the limit. This seems a little strange and I wondered if it was worth my time writing to try and change this decision ?

Fae

System

Not really strange. That card is now frozen in the state that it was in at the point that you declined the interest hike which includes the credit limit.

Paul_Herring

Fae wrote: »

I wondered if it was worth my time writing to try and change this decision ?

Probably not. How much were you hoping to reduce it by? What's your total credit limit across all (unsecured) products?

Fae

!!!!!! I see your point, I asked for the card to be frozen so they have froxen everything until it's all paid off, fair enough.

My total limit accross all unsecured products is 12,750, this is all Credit cards, and just under half my income. The card I was hoping to reduce is £5K and I wanted to reduce it to £2.5K.

Fae

thenudeone

It's an interesting point.

They will continue to report the account to CRAs until it's cleared.

If they continue to report the "credit limit" as the total amount of credit available, that's not technically correct, because the total amount you could possibly have outstanding is the current balance plus a small allowance for interest and charges not yet added.

It's worth making the point to see what they say, but it may be that it will take a complaint to the Ombudsman or Information Commissioner to get clarity of what the number reported to the CRAs as "credit limit" actually means.

Paul_Herring

£2,500 reduction from a total of £12,750 isn't likely to improve your score too much[1] - I wouldn't waste your time contesting it.


[1] if a company is going to refuse you for having a total of £12.7k, they'd likely refuse you for having £10.2k.

Fae

Thanks for the help, sounds like I would be best of putting my efforts into paying of the card as quickly as possible.

Fae