Beware - Your Card limit may reduce suddenly

SarahNeedle1872

Dylanwing wrote: »

I have had a card with Sainsburys for many years, and at the end of last year, I paid in a large sum of money, and as if by magic, my limit reduced leaving me about £15 to spend. I complained, asked many pertinent questions, but they stood firm, and were a bit evasive.
This Month, I made a further deposit, and once again, my limit reduced with little leeway. On saturday I enquired and got a BS story, today, the cat was let out of the bag. Each Month, 4,000 'undesirable' accounts are automatically checked, and if the balance has reduced, the limit is reduced to match the balance as close as possible. So, if Sainsburys do this, is it common practice across all HBOS and subsidiaries?
Needless to say, I have written to the Chief Exec (As if he will read it!) asking a lot of awkward questions, but this really strikes me as highly unethical. Surely the limit is effectively being withdrawn at the time of the first search? What happens if money is paid in for a specific purpose and that person has made a binding financial committment, when the limit is removed? It nearly happened to me, but I bought my car just ahead of search date, thankfully. Why are customers not advised and offered a low-interest loan? To me, the whole practice really stinks, is dishonest and highly unethical. Do you agree? Can anyone shed any further light on this? Any ideas for tips in challenging the Bank? Is it worth involving the Ombudsman if it is not resolved satisfactorily? All thought welcome!
Be warned!
Oh, and if you wonder about my credit rating, I recently took an unsecured loan with minimum fuss and was told my rating was 'Excellent'. Sainsburys seem to rate me as 'Sub-Human'. You choose!

I don't understand this at all, surely if u are carrying a balance on ur card, they would keep the limit in the hope u would spend more money with them... thus charging u more interest. I do know that Sainsburys Bank have had a lot of problems with bad debt recently, so they are making their lending criteria a lot stricter, but thats no excuse for they way they are treating their customers!
I have just cleared £2.5k off my Sainsburys card, so I'll be interested to see if my limit drops.
BTW did they give u the 30 days notice (or however long it is with Sains)?

Dylanwing

Sarah - in December I just had a letter saying limit reduced with immediate effect. This week, no letter has yet been received. One of the staff said one had not been sent, another was adamant it had, but they are just such Billy Liars I don't believe anything they say any more.
Sarah, James, Peawack - Thanks for the support, I can live without the card, I just object to being treated like scum after having a reasonably well run account for 15 years, paying them a lot of interest.

JohalaReewi

Do I see another opportunity for CC companies to get extra revenue? If they reduce credit limits to just above the current balance, and don't tell the cardholder, when you try to go over that limit, you will hit penaly charges. What a nice surprise.

jamalfatty

peawack wrote: »

They are continually moving the goalposts, and customers who are necessarily financially stretched can be considerably inconvenienced by these sly tactics.

Quite possibly the daftest comment I have ever seen on this forum

blue_haddock

jamalfatty wrote: »

Quite possibly the daftest comment I have ever seen on this forum

Yep surely if they are financially stretched they should have less credit available to them rahter than having more and getting into worse trouble

napoleon

jamalfatty wrote: »

Quite possibly the daftest comment I have ever seen on this forum

be careful. All this person does is defend underhand and crooked practices by banks and credit card companies. He's not one of us, I think we can all guess who he works for , I think we've got a mole here guys and gals!!

jamalfatty

napoleon wrote: »

be careful. All this person does is defend underhand and crooked practices by banks and credit card companies. He's not one of us, I think we can all guess who he works for , I think we've got a mole here guys and gals!!

So it wasnt a daft comment then?!

I've stated in several posts that I work for one of the companies so it's no secret, havent defended them or attacked them, in all the posts have just simply said it as I see it, which I believe is sometimes a more informed opinion than some posts - by this I mean the often seen reply of questioning the legality of practically everything a bank/credit card company do.

I've done as many people have on here and reclaimed charges, including my employer, so dont assume as I work for one of them that I must be sly and underhand like them!

People come on here for advice and suggestions so if I can offer an alternative viewpoint than the cynical view most people take (I agree, sometimes justifiable, not always though) then dont see what is wrong with that.

Dylanwing

Jamal - Having seen your last post, I really wonder why you bother commenting, as you basically have no understanding of personal finance for those of us who don't earn enough to do much more than work and survive. If you read my posts, you will see that my credit rating is not that bad. You will note that my limit is now £450 on my only CC, so I am hardly a credit junkie. In the real World, if I (And many others) have an unexpected bill, we use a credit card, and then repay it over time. If doing works on the house, I will put the money on my credit card (15.9% as opposed to 4% on savings), and then use the card as I buy the materials. If I go on holiday, I take my debit card, but like to have a spare card, with available limit, in case of theft/ enexpcted problems.

Peawack is spot on, you do not expect Financial Institutions to just keep moving the goalposts, nobody can plan ahead if things keep changing without warning. And these days (Unlike when I worked in a Bank), there is no personal touch, and quite honestly, the lending decisions made by computers and the automaton type of staff employed are far worse than used to be made.

I do find your comments VERY offensive, as you seem to be labelling myself, and all others who do not earn a vast salary as some sort of financial filth to be avoided by Banks, so that they can only deal with rich, arrogant people like yourself. I work hard, am honest, pay my dues, am treated as a cash-cow by Government, Councils and Utilities, but occasionally need a short-term financial fix - Why am I any less deserving of the Banks support? OK, maybe reducing my credit is not a bad thing, but why not to a compromise figure? Why to a point where I deposit a large sum, in good faith, and then get left with no available credit? Last time, I paid money in ready to buy a car. Had I not paid the balance in full on purchase, I would have lost my deposit and not been able to pay for the car (See above why I put the money in that account). THAT is what happens in the real world if your chummy little Bankers mess people around!

ontheup_3

I had to contact Barclays yesterday and while i was on the phone i asked about this situation as i was worried after reading so many stories of it happening it could happen to me and thus get cought short !!

She was very nice and didnt seem to hide anything from me , she said that they check account continuous and if they feel a customer is a little streched they do this to cover themselves and the customer , she also said i should have no worries as my credit levels are well within my capabilities , i pay all 3 of my cards off in full every month .

The question is if they feel your limit is ok when they give it to you and your account is run in the correct manner , why take it off someone , but after reading quite a few of these stories it does seem that there is no (or very little) notifacation of the credit limit being reduced , I think the problem is nowadays its all done via computer and not a human looking at these accounts !!!

As for jamal , i feel that you are just here to make yourself feel good by undermining others , you might have more knowledge in this field than a lot but i feel that you can put that to better use by helping people on here rather than making comments to try to be little people . we are (nearly) all here for the same reason and this site has helped me a great deal and i have a great credit recoerd thanks to this site and users that try to help , so if you do have the knowledge then please try to use it in a positive manner for all not just to makle yourself feel big and clever !!

SarahNeedle1872

ontheup wrote: »

She was very nice and didnt seem to hide anything from me , she said that they check account continuous and if they feel a customer is a little streched they do this to cover themselves and the customer , she also said i should have no worries as my credit levels are well within my capabilities , i pay all 3 of my cards off in full every month .

The question is if they feel your limit is ok when they give it to you and your account is run in the correct manner , why take it off someone , but after reading quite a few of these stories it does seem that there is no (or very little) notifacation of the credit limit being reduced , I think the problem is nowadays its all done via computer and not a human looking at these accounts !!!

Isn't it funny how suddenly the banks 'care' about how we run our accounts now... More like, they are worried that they could end up loosing money if someone goes bankrupt!!

I'm sure it was only last year there were two or three stories in the papers about people who commited suicide becuase they owed money on 10/11/12 credits cards... Where were the 'caring' banks with their account reviews to 'protect the customer' then?

I think moves like this are to try to 'weed out' people they feel are less favourable as customers (much like Morgan Stanley are atm), altho Dylanwing appears to be the perfect customer, running an account with an outstanding balance!

Jamalfatty - what most people have a problem with is not how they run their companies (frankly it's entirely up to them), but how they appear to be so underhand when doing it. OP had his rate reduced twice, re the second time, they still haven't bothered to notify him! All the banks need to do is extend a little common courtesy to people, rather than being underhand and virtually 'forcing' people to switch banks - altho this is what many of them appear to want!