Punished for stoozing?

With some major purchases in mind I decided to stooze on the 0% halifax credit card. I've loads of trouble with the card which initially didn't work at all, and now will only work when I don't have to put in a pin.

I've had the card for 5 or 6 months, I've made my purchases, I pay off the minimum every month. There is enough in my halifax savings account to pay off all bar £400 of the bill, and I have plenty of money being paid in to my reward account every month. But I have also been shifting money around, on a loop into various high interest current accounts, so my halifax reward no longer has a substantial amount in it, and plummets to a few hundred. I've never been overdrawn and never will be. I had a second basic current account which I have switched to M&S.

Today I got a letter from halifax to the effect that having reviewed my account they have reduced my credit limit. In itself that's no big deal but it's more than a bit insulting and I feel I'm being punished for optimising my finances.

I should have closed that crap interest savings account a long time ago, i only kept it for the prize draw. I certainly will close it now.
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Comments

  • If you stooze, you credit utilisation will be higher leading to lower credit 'score'

    If this lower 'score' (there is no actual score, only individual company criteria) does not meet Halifax's standards, they can reduce your credit limit. It is their money, not yours - and they are choosing to not lend it to you.
  • bouicca21
    bouicca21 Posts: 6,512 Forumite
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    Well of course it's their money and they can lend when, how and to whom they see fit. It just seems strange to me that the only debt I have is on this credit card, and that 6 months ago they were willing to lend me £x and that by taking up their offer (and not even getting to £x) - with no change in income - they consider me a worse credit risk.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    bouicca21 wrote: »
    Well of course it's their money and they can lend when, how and to whom they see fit. It just seems strange to me that the only debt I have is on this credit card, and that 6 months ago they were willing to lend me £x and that by taking up their offer (and not even getting to £x) - with no change in income - they consider me a worse credit risk.

    Banks have their own agendas too. I doubt that this directed at you personally. More likely to be a change in board policy to reduce exposure to a particular product line. Given that credit cards are next in line for review by the FCA.
  • As Thrugelmir says. I had a similar experience with Halifax at the back end of 2013. I had the Clarity credit card with a decent limit and used the card as many do (foreign cash withdrawals, mainly), until an account review, at which point my limit was cut to £550. This was after a particularly intensive month involving (IIRC) 16 cash withdrawals totalling nearly £2k (all in foreign currency).

    Despite the fact that this was repaid in full, as had all other statement balances involving forex cash withdrawals, they would not reinstate my limit. This remains the case to this date; I only keep the card because, despite its ridiculous limit, it's still an excellent card for overseas. This exact same thing happened to a friend of mine at around the same time (no idea whether his has been reinstated).

    So, basically, Halifax seem to get a bit touchy with no good reason - I was a bit annoyed and insulted at the time too, but I guess it's up to them. I did question the instant reduction with no notice, but was fobbed off...I hadn't experienced any issue (luckily it happened once I was back in the UK), but my friend was actually cut off in South America!
  • sinizterguy
    sinizterguy Posts: 1,178 Forumite
    Cash withdrawals on credit cards are seen as high risk - people only do this as a last resort. If you had out through a few other transactions you would most likely have been fine.
  • Cash withdrawals on credit cards are seen as high risk - people only do this as a last resort. If you had out through a few other transactions you would most likely have been fine.

    Agreed - however, on a card which advertises such as a specific benefit, it could be argued that the fact that it'd been paid off in full every month, and the withdrawals are all foreign currency, that this isn't such a risk.

    Cash withdrawals on a CC, where a balance is being carried and only minimum payments are being made, perhaps, is a definite red flag - forex withdrawals repaid in full, not so much - others on here do the same (chattychappy springs to mind!).
  • a&akay
    a&akay Posts: 526 Forumite
    Mine's been reduced twice now as the minimum's plus a bit have decreased the balance. No trouble opening a second Barclaycard, Tesco, another 123 and M&S so it's their own criteria that's the issue. It's about to be paid off before the 0% ends in May like all our cards, except Santander 0 and our 123s which are useful for foreign spends, cashback and continuous balance transfers to pay off our other card minimums at 0% fee for the duration of the offer. New cards with long balance transfer deals are used to pay down the 123 so it can be constantly used.
  • If you stooze, you credit utilisation will be higher leading to lower credit 'score'

    If this lower 'score' (there is no actual score, only individual company criteria) does not meet Halifax's standards, they can reduce your credit limit. It is their money, not yours - and they are choosing to not lend it to you.

    And where do they get their money from? It's the investors' money, not theirs. I suppose it becomes theirs when they borrow it from the investors, like the money becomes yours when you borrow it from Halifax.
  • shortcrust
    shortcrust Posts: 2,697 Forumite
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    I don't get why people feel insulted by stuff like this. It's like feeling insulted by bad weather or the lottery machine that printed your lucky dip. It's not as if a real person has made an informed decision about you. Give them a call and tell them if you think the decision is wrong and they might put it back up.
  • Voyager2002
    Voyager2002 Posts: 15,267 Forumite
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    You are missing the point... They are in business to make money, and you are using their products in a way that costs them money. While they offer free foreign currency transactions on the Clarity card, there is a cost to them of providing this: they offer it in order to attract customers who will mainly use the card in other, more profitable, ways. Similarly, people who 'stooze' and obviously know what they are doing will not be profitable customers... An organisation under financial pressure will do its best to discourage unprofitable customers, while working hard to attract those who are likely to end up paying lots in fees and interest.
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