Beware - Your Card limit may reduce suddenly

Robflh

Hi Dylanwing

I wish you the best of luck in claiming back your charges but remember they will make everyone pay for every pound that is reclaimed.

I think you may find that the T&C is watertight. You will be asking legal people to look over a document that has bee drawn up by legal people. In my Amex T&C, it says the following. We will decide, at our discretion, your credit limit from time to time and inform you what it is.

As the T&C does not state what my limit is, changing it will not constitute a variation in the T&C and therefore they do not have to give any notice.

As it does not state, the limit can go down as well as up. You could argue that as you have only ever had increases, it would be reasonable to assume your limit would only go up. When you get a reply from the Ombudsman can you post it.

Using my reduction as an example. When Amex reduced my limit by £3,000 they left me with around £600 in available credit. Unfortunately, for me, I had several transactions on their way through, which soon wiped out the £600. However, they did not leave me with nothing.

Therefore, unless it was a large purchase, it would be unlikely for you to have your card declined. Never the less somebody may be stranded or have something else happen to them that would be considered news worthy.

Dylanwing

You were lucky Rob, in both occasions I had about £16 limit left - I am certainly going to highlight the fact that I was not notified about the limit change though. Another point is that they claim I have until 18/9 to refer this, taking the date back to the final letter of my original complaint of the first limit reduction - Surely though the latest one is a new complaint and the referal period should re-start? As I said previously, the latest letter purporting to be from the CEO really is poor, evasive and rude. It will be interesting to see what the Ombudsman thinks.
I agree regarding the charges, but the last letter really has got my back up, and after all of the interest I have paid them over the last 10 years, I am not being treated this way. I have old-fashioned expectations regarding courtesy, politeness, and if things go wrong, I want a proper apology. And I no longer shop, or buy my petrol at Sainsburys... That'll really teach them!!!!!:rotfl:

ictmad

this recently happened to me with rbs card i payed of £500 then credit limited got reduced without my knowledge and been charged twice now for being over my reduced limit:mad:

Dylanwing

ictmad - I would try asking for the charges back setting out all of the details - Possibly do it in writing as they find it harder to just fob you off. During one of my calls, I was told that they cannot charge you for going over limit if it is as a result of a credit reduction. If you can prove that you did not use the card once you were aware of the limit reduction, they don't really have a leg to stand on.

Did they actually advise you of the reduction by letter?

Robflh

Hi Dylanwing

Actually, I was not so lucky. As I said, with the transactions that were on there way through and the ones I made before I had received the letter to tell me of the reduction, the available credit that they had left me with disappeared very quickly and I was charge £12 for going over my limit.

I put petrol in my car and then I had my Amex card refused, so I used the only other card I could, my Mint card. When the interest was added to that one, it went over my limit and I got another £12 charge.

Having had the rug whipped from underneath me, I have been running around like a headless chicken, trying to find money for this and money for that.

Today I received my Mint statement. As I was unable to make my last payment soon enough, it has a £12 charge on it for a late payment. I still have not come to the best part yet. The late payment charge put me over my limit, so I have another £12 charge for that.

Thanks to Amex, in total so far I have had £48 in charges. The only good thing is that the charges are lower now, otherwise they would have been at least twice that amount.

I am going to ring Mint to see if I can get some or all of their charges back but I am not going to hold my breath.

I will not be able to post for a few days, this week is the last Friday in the month and I have to get my paperwork finished for my volunteer driving but I will still read any posts.

taxi73

Hi Rob the reason I wanted the tesco card at the time was for a 0% deal...I don't pay interest if I can help it.Like others once this debt is gone I will not be using cards hence why I had a lot of cards still available to me as each and everyone was clear

Robflh

Hi taxi73

I thought that was the reason and if you have not worked it out by now, kill the cards you are not using. 0% offers are for new customers and a number of years after you have cancelled a card you will be considered a new customer.

Check out my post on the thread below, it may be of interest to you. Well, now I have had a break, it is back to the paperwork.

http://forums.moneysavingexpert.com/showthread.html?t=480084

taxi73

Thanks for that I closed all those cards a few weeks back...so have kept the egg and barclays both new 0% and my MS paid off in full each month and used for cash back.

GettingThingsDone

I think the moral of the story is to ignore what we think banks and cc companies should do and wake up and smell the reality.

Ignore the glossy friendly advertising, ignore all of our old pre-conceptions of friendly bank managers, of singing assistants (Howard!?!) etc.

As I see it we have 2 reasons to be optomistic
1) MSE - helps us get out of old inefficient ways of thinking about money
2) Gap in the Market Theory - a genuinely 'straight' (as in open and honest) bank could clean up

gtd

GettingThingsDone

A couple of points

1) CC company tactics - MacBoy is absolutely spot on. Basically they've got us hook, line and sinker. The urgency to get all debt off of credit cards has significantly increased.
2) Martin :money: may need to update one of his key pieces of advice - "is it better to pay off debt with savings?". The assumption is that you'll keep your credit limit and so if you need to borrow again, you'll have access to credit. However, if your credit limit is significantly reduced, you need to weigh up the price of having credit available (i.e. the interest you are paying on your balance) against the requirement for that credit facility.

Hope that makes sense to somebody!!

For example, If I have £10,000 in CC debt (at x%) and £10,000 in savings (earning y%), the current advice is to put the savings into the CC account thus saving me paying interest (at x% - y%) every month.

Again, under the current advice, if I then do need to spend, say £2000 in an emergency, I can use my cc card.

However, under the new rules my CC limit may well be reduced to a useless level e.g. £100 once it has been paid off with my savings. If I have an urgent need to spend £2000, I can't.

So now is it worth keeping a balance of £1000 on the CC, and £1000 in savings, as a cushion to handle emergencies (e.g. car blows up). Obviously this would cost (x% - y%) every month - so it's not cheap.

I don't 'do' overdrafts by the way but I imagine they (the banks) will start applying the same logic to them. i.e. as CC debt is squeezed down, it will start appearing in overdrafts. Banks won't want to be holding all of that if the economy starts faltering...

Sorry for the long-winded post, but the financial landscape is changing...

gtd