Nationwide Credit Card - Reduced Limit

seekstris

Hi Guys,

I am a long time lurker of these parts, and as I am confused I thought I would pop here and ask.

I have had a nationwide credit card for 2 years now (I got it as soon as I graduated and started work). I have been in full time work ever since, and mostly use it for work related things.

Initially my limit was 1.8k I reduced this to 1.2k personally, and then around 12 months ago nationwide officially reduced it to 1.2k. I was not surprised then, as I had a large credit utilisation.

So fast forward to now and its just been reduced to £800, and this time I honestly have no idea why.

• My credit score is 825 (Fair) BUT it is that low because they reduced the limit, before that it was 900+ (Good).
• I have not missed a single payment in the past 5 years
• I spend on average around £300 a month on the card. This does vary depending on work as when I am away for a whole week this normally gets up to the limit around £1k. This has been rarer in the last 10 or so months.
• I pay a fixed amount of £200 a month via direct debit and then normally another £1-200 manually. (I make sure there is always some in the account as per the MSE guidelines so they can make profit off me)

I think that's all the relevant details. The only reason I can personally think of is that they don't think I use enough of the limit per month so want to reduce their exposure. The issue is that when I go on a week trip with work I need at least a 1k limit.


Can any harm be done by ringing them and asking for a reason / for them to raise it?


And is there any advice to stop this happening in the future?


Thanks for the help guys

[Deleted User]

You could ask them to increase it again. Assuming it's just part of a general limit reduction programme, you may get lucky. But if there's something about you that they don't like (eg debts elsewhere, lots of gambling etc), they may not.

Not much you can do to prevent it in the future though, although I would recommend you have at least one other card, if not more, so that you can be prepared for any sudden limit reduction (or even closure).

shortcrust

seekstris wrote: »

Hi Guys,

I am a long time lurker of these parts, and as I am confused I thought I would pop here and ask.

I have had a nationwide credit card for 2 years now (I got it as soon as I graduated and started work). I have been in full time work ever since, and mostly use it for work related things.

Initially my limit was 1.8k I reduced this to 1.2k personally, and then around 12 months ago nationwide officially reduced it to 1.2k. I was not surprised then, as I had a large credit utilisation.

So fast forward to now and its just been reduced to £800, and this time I honestly have no idea why.

• My credit score is 825 (Fair) BUT it is that low because they reduced the limit, before that it was 900+ (Good).
• I have not missed a single payment in the past 5 years
• I spend on average around £300 a month on the card. This does vary depending on work as when I am away for a whole week this normally gets up to the limit around £1k. This has been rarer in the last 10 or so months.
• I pay a fixed amount of £200 a month via direct debit and then normally another £1-200 manually. (I make sure there is always some in the account as per the MSE guidelines so they can make profit off me)

I think that's all the relevant details. The only reason I can personally think of is that they don't think I use enough of the limit per month so want to reduce their exposure. The issue is that when I go on a week trip with work I need at least a 1k limit.


Can any harm be done by ringing them and asking for a reason / for them to raise it?


And is there any advice to stop this happening in the future?


Thanks for the help guys

I might have misunderstood, but do you mean you deliberately pay interest to them when you don't have to? Does MSE expert really advise people to do this?! There are people on here who have never paid a penny in interest to their credit card issuers without any problems.

I've no idea as to why they might have reduced your limit, but as zx81 suggests, just ask them restore it and see what happens.

[Deleted User]

shortcrust wrote: »

I might have misunderstood, but do you mean you deliberately pay interest to them when you don't have to? Does MSE expert really advise people to do this?! There are people on here how have never paid a penny in interest to their credit card issuers without any problems.

I missed that bit. OP - NEVER pay interest if you don't need to. It's a mug's game and doesn't improve your credit rating.

The_Boss

Yeah, not sure where this site advises paying interest...

seekstris

hmm okay so maybe I was misreading the article. Although am I correct in thinking that, that really should not alter my score as I still repay well above the minimum payments.

Its strange as I am fairly confident I read somewhere that some people were rejected because they had always paid off on time etc and hence were not profitable to the bank. Having said that it's not in the main article and I can not find that anymore.

I will make sure to pay off in full now, thanks guys.

The_Boss

seekstris wrote: »

hmm okay so maybe I was misreading the article. Although am I correct in thinking that, that really should not alter my score as I still repay well above the minimum payments.

Its strange as I am fairly confident I read somewhere that some people were rejected because they had always paid off on time etc and hence were not profitable to the bank. Having said that it's not in the main article and I can not find that anymore.

I will make sure to pay off in full now, thanks guys.

If you are talking about the Experian score then ignore it as it means very little.

In the eyes of lenders - who knows? They have different scoring criteria. Paying the minimum sets a 'minimum payment' marker on your file though and lenders may base their decison partly on this. It's preferable to be paying more than the minimum in most cases as you have done. The benefit of paying in full is no interest.

seekstris

Okay that's certainly some food for thought. I always pay more than the minimum which is good, but will just pay it off in full when I can.

I will give them a call later, doubt they will tell me why, but hopefully they can raise the limit again.

giblet10

I'd echo others, get yourself an additional card.

From reading other posts on here, most, if not all lenders have a limit reduction programme from time to time

The banks don't have infinite amounts of money to have sat idle in the form of unused customer credit limits so recycle it in the hope of lending it to those who they will make more money from.

I have never had any of my limits reduced but it can only be a matter of time as I don't use my full limits.

Experian_company_representative

Only the card provider can shed light on the limit reduction decision, so it's certainly worth asking them. There's a good chance they are basing this decision not just on how you are managing their card but on your wider credit record. If we are giving you a 'fair' score on our guide rating (which, by the way, is built using similar algorithms to many lenders, including the one in question here) then that suggests that your overall credit situation is less than ideal. I suggest you examine the pointers we provide alongside the score to identify the key issues behind such a relatively low rating. The UK average Experian Credit Score is, I think, 783, but that is still about 100 below the threshold for 'good'.

James Jones

seekstris

Experian_company_representative wrote: »

Only the card provider can shed light on the limit reduction decision, so it's certainly worth asking them. There's a good chance they are basing this decision not just on how you are managing their card but on your wider credit record. If we are giving you a 'fair' score on our guide rating (which, by the way, is built using similar algorithms to many lenders, including the one in question here) then that suggests that your overall credit situation is less than ideal. I suggest you examine the pointers we provide alongside the score to identify the key issues behind such a relatively low rating. The UK average Experian Credit Score is, I think, 783, but that is still about 100 below the threshold for 'good'.

James Jones

Hi James, Thanks for your reply. The reason its only fair (according to your scores) is that they reduced my limit.

I rang them and they couldn't give me a reason (they asked standard questions eg missed payments, other cards etc) but talked to them and they said they would review and get back to me in a few days.