Barclaycard does not honour its own credit limit.

EwanOroot

EDIT: I have the answers that I was looking for (below) - thanks.

I recently started to use my Barclaycard Gold card for on-line shopping. I thought it would be prudent to set the credit limit on the to £50 to afford myself a bit of protection as I've assigned this card to my Amazon Kindle account (it needs a valid form of payment on the account) and we download things occasionally to the Kindle.

Two or three months ago my statement was for £49-something. Soon afterwards - before I paid the bill - my wife downloaded a couple of cheap books from the Kindle which took the current balance over the credit limit.

In the next statement, Barclaycard charged £12 for going over the credit limit! I called and argued with them and they assured me that this would not happen again. Guess what? It did and they have charged me another £12.

I am near apoplexy about this. The credit limit is artificially low and does not reflect my credit status (I reduced the limit from about £15,000) so they are not at risk, nor have they done anything to deserve the charges. Quite the opposite! Transactions which should be rejected are being authorised and then they charge me for it. I could understand this if the transactions had been the old-style paper slips which arrive at the credit card company a while after the transaction but not where they are on-line and can be declined in real time.




Now for the questions:

1. Is there a better way to protect myself for online transactions whilst still retaining the benefits of shopping with credit cards?
2. Are there any credit cards out there which actually honour credit limits?
3. Would complaining to any official body change anything?

And the answers:

1. Yes, use a prepaid credit card.
2. No, not really. Except prepaid credit cards.
3. No.

Thanks,

Ewan

[Deleted User]

Just about all credit cards will allow you to go over the limit. Under floor transactions won't be checked in real time, for example. And no card company wants the negative PR of declining a transaction in an emergency - for example, you're stranded somewhere and need to hire a car/get a train ticket.

It's the customers responsibility to ensure that they don't overspend.

Complaining would be a waste of time, in my opinion.

I'd ask for a higher limit.

StuC75

Just because the credit limit is low its not necessarily there role to enforce that! If the individual amounts are low they may not be processed in the same way.

Whether your credit limit is £100 or £100,000 - you still have the same protection for online transactions, if you are not making the transactions you are not liable..

Having such a low limit and high utilisation on that card is probably having negative impact on credit report - regardless of it being you reducing the limit.. it may not be interpreted that way..

In future ask your wife to confirm the credit card balance immediately prior to making a purchase if you are likely to be in that situation.. Or work with a Higher buffer - e.g. If you spend on Average £50 month, then have £110, so can have 2 months in place at any time plus a little extra...

jamesml

I can't see why you are so angry to be perfectly honest. You know the limit is £50, you bought £49-odds worth of whatever you bought, and then continued trying to use the card. You made the choice to have such a low limit, and you made the choice to put spending above the limit on your card.

Either increase your limit, don't spend as much on it, or pay it off sooner. It's not Barclaycards fault that you keep spending on it above your limit. I'm pretty sure that they set out in their T&C's that if you spend above your limit you will be charged.

aleph_0

Ewan, I think you're misunderstanding the purpose of a credit limit. The limit is there as protection for Barclaycard, not protection for you. Barclaycard may allow transactions over your limit if they wish, and charge you a fee for doing so. They might do this when the transaction is offline (so the retailer hasn't checked the current balance before doing the transaction), or they feel the risk is low enough. It could be assumed that a consumer might welcome this, to avoid embarrassment or inconvenience of a card being declined.

A prepaid mastercard/visa, such as the Orange Cash card http://cash.orange.co.uk/, might be more appropriate for your requirements (such a card is designed for online (i.e. balance checked)-only transactions, so shouldn't normally allow negative balances, although I don't think this is absolutely guaranteed).

EwanOroot

aleph_0 wrote: »

Ewan, I think you're misunderstanding the purpose of a credit limit. The limit is there as protection for Barclaycard, not protection for you. Barclaycard may allow transactions over your limit if they wish, and charge you a fee for doing so. They might do this when the transaction is offline (so the retailer hasn't checked the current balance before doing the transaction), or they feel the risk is low enough. It could be assumed that a consumer might welcome this, to avoid embarrassment or inconvenience of a card being declined.

Thanks for this explanation (and to others who have said similar above). I've obviously been naive about who the credit limit helps.

aleph_0 wrote: »

A prepaid mastercard/visa, such as the Orange Cash card, might be more appropriate for your requirements (such a card is designed for online (i.e. balance checked)-only transactions, so shouldn't normally allow negative balances, although I don't think this is absolutely guaranteed).

Nice! This seems closest to what I need.

StuC75 wrote: »

Having such a low limit and high utilisation on that card is probably having negative impact on credit report - regardless of it being you reducing the limit.. it may not be interpreted that way..).

That's an interesting point.

dalesrider

Why do people think that the credit limit is a solid wall. Same goes with limits on current accounts.

You have to remember now that with the ability to make a payment to bring your account back in line within the same day.
Rejecting payments for overlimit is a very hard thing to do now.

thegfb

I don't want to seem like I'm bashing you as you have made a genuine mistake, but the best way of thinking about it would be if say you were a few quid short of the credit limit and then interest put you over the limit... they wouldn't refuse to apply interest to the balance because of this! Customers in this situation must be quite lucrative to them.

jonesMUFCforever

OP having such a low limit could seriously damage your credit rating!

You have a limit of £50 and used £49 or 98% of available credit.

Say you had a limit of £1000 and spent £50 you are only using 5% of available credit - this would look good when applying for extra or further cards.

[Deleted User]

Get yourself a pre-paid card, and top it up, as and when you wish to buy something.

zerog

I didn't even know a £50 limit was possible! Most cards have a £500 min limit, some bad credit ones have a min limit £250 or £200...