Reduced credit limit: can I appeal?

Voyager2002

I recently opened a new Lloyds Mastercard and have been using it for 'slow stoozing'. This is a card that offers a long interest-free period and low fee for balance transfers. I did not have much in the way of a balance to transfer, but have been making my usual expenditure on another card and then transferring the balances each month. I am making the minimum payments by direct debit from another new account with Lloyds.

Anyway, I logged on this morning to find that they have reduced my credit limit from 3,500 to 1,100. My balance outstanding is about 1,050, and since I am about to renew my home insurance I would like to b/t another couple of hundred before the offer finishes. Needless to say there have not been any late or missed payments.

Can anyone explain why they have done this? It seems perverse to run an offer like this to attract new customers and then act to offend them in this way... And is there any point in contacting them to ask them to restore a bit more of my credit limit?

Thank you.

[Deleted User]

Worth asking.

bayzat

Usually if they see your credit card balance has remained relatively the same for a while (i.e. you are making around the minimum monthly payments each month), they will go ahead and reduce the limit, as this indicates you may be having difficulty paying it off.

Voyager2002

bayzat wrote: »

Usually if they see your credit card balance has remained relatively the same for a while (i.e. you are making around the minimum monthly payments each month), they will go ahead and reduce the limit, as this indicates you may be having difficulty paying it off.

That would make sense on an interest-bearing account, but kind of defeats the point of an extended interest-free offer.

Lloyds_Bank

Voyager2002 wrote: »

I recently opened a new Lloyds Mastercard and have been using it for 'slow stoozing'. This is a card that offers a long interest-free period and low fee for balance transfers. I did not have much in the way of a balance to transfer, but have been making my usual expenditure on another card and then transferring the balances each month. I am making the minimum payments by direct debit from another new account with Lloyds.

Anyway, I logged on this morning to find that they have reduced my credit limit from 3,500 to 1,100. My balance outstanding is about 1,050, and since I am about to renew my home insurance I would like to b/t another couple of hundred before the offer finishes. Needless to say there have not been any late or missed payments.

Can anyone explain why they have done this? It seems perverse to run an offer like this to attract new customers and then act to offend them in this way... And is there any point in contacting them to ask them to restore a bit more of my credit limit?

Thank you.

Hi Voyager 2002.

I'm sorry to read your post and for the inconvenience this has caused. I'd recommend speaking to our Credit Card team so they can look into why this has happened and explain it to you. You can speak to them on 0845 606 2172 / 01702 278 272, they're open 24 hours.

Thanks

James.

Fruit_and_Nut_Case

Lloyds_Bank wrote: »

Hi Voyager 2002.

I'm sorry to read your post and for the inconvenience this has caused. I'd recommend speaking to our Credit Card team so they can look into why this has happened and explain it to you. You can speak to them on 0845 606 2172 / 01702 278 272, they're open 24 hours.

Thanks

James.

(My highlighting)

Judging from many posts that we see here, they are unlikely to give any information in depth. This would possibly be classed as commercially sensitive information on how they judge potential cardholders.

Perhaps Lloyds is different...

giblet10

You'd be better contacting customer relations.

I applied for their Premier Lloyds Avios using the form on their website as an upgrade to my existing Premier Lloyds Avios as I liked the new T&C's e.g. increased mileage earning and no foreign fees.

I got a letter back telling me I hadn't met their criteria - despite me not asking for any additional credit and having held the original card with them for years - never missed a payment etc.

I phoned their credit card hotline - well I might as well have phoned the local mental institute.

Hopeless company to deal with - nothing makes sense - but I did get £100 compensation for my troubles - even their customer relations rep couldn't make sense of why I was declined..

eddddy

In years gone by Lloyds and Halifax have done the same to me. They said it was to manage their exposure...

i.e. they have to keep cash in reserve, just in case you (and all their other card holders) decide to use up their full credit limit.

If they reduce credit limits that aren't being used, they can reduce the size of their reserves (or use the same reserves to open more new CC accounts for others).

Lloyds and Halifax both said they would increase the limits again, if I had plans to use them - which I didn't.

(Although Barclaycard and MBNA don't seem to be so bothered about unused credit limits.)

giblet10

Yep, never had any hassle from MBNA - although others seem to disagree..maybe I'm just fortunate with them..