Beware - Your Card limit may reduce suddenly

Dylanwing

Humph! I'm not jealous, I don't want any limit anyway!:p
BTW, just had my latest Sainsburys statement, on 23rd August my balance was £220, they wrote and advised that my limit would be £200 and they charge me £12 for being over-limit! A quick phone call got the £12 back, but with a warning that this was a one-off and I must keep under limit, so does anyone know where I can obtain psychic powers? Under £200 of course!
Just to make them more work, and because I will be re-mortgaging next year, I am requesting that they confirm in writing that my credit file will not be affected by this.:D

callisto126

I work for a large credit card provider and have a bit of experience regarding Sainsbury cards:

*Credit limits are reviewed every six months by an automated facility which checks late payments, internal credit score, recent credit requests/changes, overlimit periods etc, this can see your limit increased or decreased.
*Limits will be reviewed for increase only if there have been no changes to the limit in the last six months, or in the case of a serious bank error.
*The bank also review accounts on a manual basis by the risk department. This is based on external credit scoring - equifax, experian, call credit. In the terms and conditions the bank are allowed to seek credit information about you at any time, and adjust your limit accordingly and without notification. Any decrease made may not necessarily reflect a poor credit score - if you have many sources of unused credit the bank will perceive this as being more than you need, and as responsible lenders, will reduce the credit facility on your card.
*When the above action is taken you must write in, with a copy of your credit file for review. You limit will not be reviewed any other way and is unlikely to be readjusted.
*Minimum payments affect your score in a slight negative way, so try to pay more if possible.

Hope this helps!

Paul_Herring

Whoops - hit the thanks button by mistake. Oh well...

Could you clarify something for me...

callisto126 wrote: »

I work for a large credit card provider and have a bit of experience regarding Sainsbury cards:

[...]
*The bank also review accounts on a manual basis by the risk department. This is based on external credit scoring - equifax, experian, call credit. In the terms and conditions the bank are allowed to seek credit information about you at any time, and adjust your limit accordingly and without notification. Any decrease made may not necessarily reflect a poor credit score - if you have many sources of unused credit the bank will perceive this as being more than you need, and as responsible lenders, will reduce the credit facility on your card.

Do the T&C's allow Sainsbury to query a customers credit report at-will as it were any time they feel like, leaving footprints on the report? Or does it require customer instigation?

Thomas99

Paul_Herring wrote: »

Whoops - hit the thanks button by mistake. Oh well...

I always do that, the "Thanks" button should be on the opposite side :rolleyes:

callisto126

As far as I'm aware they can, and do, obtain credit information anytime they want. They are governed by the data protection act however, so can only use the info for the credit limit and are not allowed to hold it on file for future use. It shouldn't leave a footprint on the report, and I know that most other card providers do the same.

I've been told the FSA encourages this as part of responsible lending commitments, if this is true or not I don't know.

YorkshireBoy

callisto126 wrote: »

...most other card providers do the same.

Indeed they do, and MBNA are more 'open' about it...

13c We will process and record your personal information, including details of your transactions, to:
· search credit reference and fraud prevention agencies’ records (including information from overseas) so we can manage your account with us and make decisions about credit, including whether to make credit available or to continue or extend your existing credit (these searches will not be seen or used by other lenders to assess your ability to get credit);

I've been told the FSA encourages this as part of responsible lending commitments, if this is true or not I don't know.

It is true, and they're not alone. The same message is coming from the OFT, the BCSB, and the BBA.

gt94sss2

I don't think its been mentioned here but one of the reasons why lots of people might be seeing their credit card limits reduced - in addition to the 'credit crunch' the banks are now facing - is because of the introduction of the Basel II rules/accounting standards that start coming into force next year.

These new rules, mean that credit card firms will now have to account differently for 'unused credit card limits' and take greater account of them when they look at their total lending - where in the past they largely ignored them for accounting/risk purposes.

As such, banks are less likely to want to see large unused credit card limits for this reason as well.

Regards
Sunil

Robflh

Hi Dylanwing

You might like to watch the Dispatches programme. It is on C4 10/11/07 at 9PM.

Dylanwing

Got into my TARDIS to watch it, then came back via Skaro, Hastings 1066 and the year 3011, ready to watch it tomorrow. Daleks, Sontarans and Sea Devils are much easier to deal with than Sainsburys staff. Actually I guessed it was a typo, so have set my V+ to record it in case I forget.
Latest update - Limit now £170, reduced from £200, but I have claimed back £125 in charges. Ha, that'll teach them to mess with Dylanwing!:D It was quite interesting looking back at the statements, most of the charges were back in 2002/3 when my finances were poor, and yet they upped the limit from £4,500 to £5,850. And the Banks preach 'Responsible Lending' as they slash our limits!
And I spent some of my refund wisely, it paid for my MOT and we had a :beer:or 5 on Sainsburys! Cheers!

udydudy

callisto126 wrote: »

It shouldn't leave a footprint on the report, and I know that most other card providers do the same.

I've been told the FSA encourages this as part of responsible lending commitments, if this is true or not I don't know.

yes indeed they do that and it does not leave a footprint. Barclays confirmed that to me when they lowered my credit limit and i queried them how they do that. They query files every 6 months and if they find a lot of unused credit limits or abused credit limits they decrease your limits.

I think that is fair enough under the current circumstances of economic slowdown. but they should inform people immediately unlike barclays wherein the letter, in many cases, comes 10 days after your limit has been decreased