Credit limit decrease

rafhelp

If you had say credit limit of £3000 and then you took out another credit card and they gave you £2000 credit limit. Would your first credit provider reduce their limit by £2000 due to this new card?

Has this happened to anyone else?

Ive had limit reduced on one card even though ive actually paid back more this year than before.

I was told it is due to various factors like taking out another card and income. But Ive taken out another card in the past (which had a higher credit limit) and had lower income, and in that situation the credit limit on my first card actually increased.

Is there anyone you can talk to about this, like some financial authoritave body or someone?

CLAPTON

rafhelp wrote: »

If you had say credit limit of £3000 and then you took out another credit card and they gave you £2000 credit limit. Would your first credit provider reduce their limit by £2000 due to this new card?

Has this happened to anyone else?

Ive had limit reduced on one card even though ive actually paid back more this year than before.

I was told it is due to various factors like taking out another card and income. But Ive taken out another card in the past (which had a higher credit limit) and had lower income, and in that situation the credit limit on my first card actually increased.

Is there anyone you can talk to about this, like some financial authoritave body or someone?

Many people have massively higher credit limits and many more cards so it will depend upon your overall circumstances

what do your credit files say?

what debts do you have?

what's your income?

Tixy

Are these cards from different issuers?

If different issuers it would not be usual for a new card to be the sole reason a limit on an existing card was reduced.

But it could be part of a reason for a reduction in a limit. That said the 2 credit limits you are talking about are relatively small.

Is there anyone you can talk to about this, like some financial authoritave body or someone?

The only people who will know why they reduced the limit is the existing card issuer (or possibly more accurately their underwriting compute program).
Whilst there are regulator (e.g. the FCA) they would not be able to tell you why you card company have made the decision they have.

If you would prefer to keep the existing higher limit then it is worth phoning the lender and asking them to reconsider the decision, some people have reported they will sometimes allow you to keep a higher limit.
But if they choose not to then obviously that is there right.

eskbanker

There are no hard and fast rules that you can rely on, each credit provider will make decisions based on its own view of the risks of lending to you. As they've said, it can be due to various factors but total amount of credit available to you can certainly be one, but equally it's not automatic that increasing credit with one provider decreases it from another for a zero-sum game!

If you feel you have reason to complain, then do so via the procedure each provider publishes, but unless you have clear evidence that they've breached regulations or their own Ts & Cs you're unlikely to get anywhere either with them or the ombudsman.

In this particular case, it sounds like you're just going to have to accept it and move on!

Anthorn

Going back to 2008/9 reduced credit limit problems started to be encountered more often than before. Although no concrete reason was ever put forward people rationalised that since banks now had to cover credit limits with actual funds they were pulling limits that were not being used. Perhaps that is the reason for the reduced limit and it's just a coincidence that it happened at the time you got your new card.

Other than the above perhaps in taking on extra credit you have gone over the limit which your original lender thinks you should have given your circumstances and therefore the risk has increased.

With regard to a credit limit, lenders are pretty much a law unto themselves and there is really no way of complaining about it other than to appeal to the lender itself.