Card limits being cut again?

cos_2

Some years ago, as the 2008/9 recession took hold, many lenders started cutting CC limits and I remember many complaints on the forums. Personally, I had one card that went from £4000 to £400 overnight, which I then cleared and closed.

It made sense in that lenders were being forced to improve their liquidity ratios, but I assumed that was all over. My limits have either stayed the same or slightly increased over the last few years.

But just a couple of weeks ago the Post Office (Bank of Ireland) told me they are halving my limit, unless I call them with a good reason not to.

I don't mind as I never go anywhere near the limit, but wondered if this is starting to re-emerge as a liquidity concern across the board. Perhaps it's just Bank of Ireland. Perhaps it's just me!

Thoughts?

Nasqueron

Just anecdotal evidence, just as mine is - I have NEVER had a card limit cut in 15 years of having them even when I wasn't using anywhere close to the limit - my Sainsburys Amex was over £13000 and I normally spent around £400-£600 a month on food/fuel and paid off in full. I closed it when they wanted to charge and got the Sainsburys branded Mastercard with a £4500 limit and spent about the same and that wasn't cut. I had nearly £9000 on my bank card and never spent more than about £500 on it (again paid off in full every month) and that hasn't been cut.

MoneyMission2015

Before the recession the limits on my credit cards & Next account were regularly increased, obviously to try & encourage more spending, which I was all too happy to do.


Then during the recession, although none of my limits were cut, they were also not increased. All limits stayed at the same level for around 4 years.


However in the last few months I have found that all my credit card limits have been increased quite dramatically & I've also been successful in applications for 2 new balance transfer cards. In total I have a spending limit of £31,500 over my 5 credit cards and Next account, with one card having a £10,500 limit!


I'm just glad I have had my lightbulb moment and have transferred my outstanding debt to 0% interest cards. A few years ago I probably would have just gone ahead & spent all that money without giving it a second thought.


I don't have any credit accounts with the Bank of Ireland so maybe as you said it is that particular bank, rather than an overall trend. Do you spend on your Post Office card? If you don't, maybe they think you do not need the limit they have given you, so are adjusting the account to your needs.

Shopper_99

I have noticed that sometimes banks cut your limit down if you don't use it. This is normally done in the way you describe where they send a letter saying they will do it if you don't respond to ask them not to.

It may just be the Post Office Bank trying cutting down on their total liability rather than something that is across all banks.

cos_2

MoneyMission2015 wrote: »

Do you spend on your Post Office card? If you don't, maybe they think you do not need the limit they have given you, so are adjusting the account to your needs.

I don't use it much and mainly just for overseas spending in the last two years. Funnily, I'd spent around £1000 on it when I got the letter!

Thanks to all for the replies. It looks like the PO are just tidying me up

planteria

like Nasqueron, i have had 15+ years of limits only going upwards, but i did have one exception last year: Halifax started to gradually lower the CL on my card with them, which had a balance transfer on it. i decided to clear and close. no sign of reductions since, and hope i won't see any:think:
i don't think there is a general trend of limits being reduced, so perhaps BOI are just trimming where their systems suggest they ought to.

sinizterguy

More anecdotal evidence - In the past two months I have just been offered credit limit increases in excess of £10k total across 2 cards and a new card with a significant limit ....

JohnM5206

Agree with OP. Had used Post Office Card at beginning of this year to get cashback offer, but normally overseas fee-free purchases only. £10K limit reduced to £5k "since you are not using anything like the limit allocated. Phone to discuss if not happy.." I have no issue with that decision.

andyfromotley

opposite here, i have my limits increased on my unused cards since i started to seriously pay down my debt. I cant help but think that BC used the amount i have outstanding on my virgin card as my new credit limit in an attempt to get me to switch. Which in fairness is exactly what i can do if i cant get a lower fee 0% transfer when the current virgin one runs out.

So doesn't seem to be an across the board thing yet.

Puddylove

Mine haven't been cut - including with Halifax.
I wish my limits were lower - I have £35k available credit on 3 cards. Who needs that?! (And/or is daft enough to use it?!)

I'm scared to lower the limits, close cards as doing so might adversely affect my credit history, and I'd like to buy a house soon.
P x

evochaz

Il"m really annoyed as I voluntarily reduced my automatic £5000 credit limit with Santander down to £1500 so I wouldn't be tempted. Always repaid on time and have a high credit score. now want to Increase limit so I can buy a new kitchen and Santander won't increase it- even though I have reduced my mortgage and had a pay rise! They told me all I can do is appeal - but that involves another credit search on a card I already have - and underuse. Any advice please?