Credit Limit Slashed without Notice

wardyface

It makes me suspicious that the ridiculously high £15 k credit limit was to make me think I was a trusted customer. I've never spent anywhere near that, usually hovering well below £1,000. I only got to £2 k because of Christmas and had already cleared £400 off the Christmas spend with one cheque well before the due date. The minimum payment required was £59 so I was well above that.

Not to tell me though, and the only way I found out was when my card was declined

Martinslovechild

My experience has been the complete opposite. In the past 6 months alone 3 of my credit card limits have been increased. I fail to know how the credit card companies base their decisions, given that if they contact the credit reference agencies, a search thumbprint would be made for anything other than the submission of payment/limit data.

Surely the only other way they can base their decision is on payment data. If a person pays only the minimum monthly payment then clearly they're a different risk from somebody who regularly pays more (from their perspective, anyway).

wardyface

It does seem bizarre doesn't it. TSB gave me a credit limit of £15 k. If they thought I was a problem why give it to me. Now they've slashed it right down to £2 k without telling me. You'd think I'd have a right to know why.

If I get the chance to speak to those who made the decision I shall certainly ask the question, having so far only being able to speak to the call centre operator

[Deleted User]

Quite possible that they're trying to reduce their overall exposure. It costs them to have enough cash sitting around to cover everyone maxing their credit limits.

You said that you are normaly only using £1k, so they will have seen that they can cut your limit without causing too many issues, at least in theory.

YorkshireBoy

Martinslovechild wrote: »

In the past 6 months alone 3 of my credit card limits have been increased.

I'm puzzled by the art of credit scoring too.

MBNA have just increased the limit on one of my cards with them from £19,500 to £24,500 (current balance is around £18K).

Tesco have recently accepted me for an £8K card

I didn't expect either, being as I have available credit well in excess of my income and used credit (including a maxed out £10K O/D facility) of well over half my income.

I fail to know how the credit card companies base their decisions, given that if they contact the credit reference agencies, a search thumbprint would be made for anything other than the submission of payment/limit data.

The lenders take a monthly feed from the CRAs, which does not leave a footprint. Google 'consumer indebtedness index' (CII) for details.

maninthestreet

so you paid off £400 of a £1090 debt, with leaves a debt of £690 - so how can a credit limit reduction to £2000 leave you 'into the red'?

wardyface

That was on my last statement. I'd had a further spend after that but nothing huge as to cause any problems (I wouldn't have thought) as it was within the credit limit I had at the last statement in January 2013, eg £15 k

I had a letter from them this morning and I thought it would be to notify me of the reduction in my credit limit. It wasn't! It was them offering me 0% if I balanced transferred in my other credit/store cards. Ey??? Why would they on the one hand be squeezing me and the next inviting me to add yet more credit to the card. Could it be they have two different departments doing different things?

droiderm

Was there any particular reason you were buying petrol on your credit card ?

[Deleted User]

wardyface wrote: »

Could it be they have two different departments doing different things?

Yes. .

wardyface

Why, is it relevant? Actually it's a good job I did I suppose as I wouldn't have known about the issue otherwise