Co-op Credit card limit decreased with no warning!!!

JodiJ

Hey all

I need some legal advice here, today I tried to pay for some items and surprise my credit card got declined... Very embarrassing!!! And I was very annoyed!!

I knew that I wasn't over my limit however I get home and call the co op to be told they have decreased my limit.. And a letter was in the post... And this was decreased due to negative information from call credit file,

Last month I went over my limit and paid the £12 however just to note I always, always pay my card off on time and this was one blip- could this be why they have decreased my limit? If so then I have received no letters or information this could have a negative impact and is this legal? Should they have given me notice that this was going to happen or something?? I want to fight this as being a loyal customer I am so annoyed at what happened today...: please anyone that can help me with some much great advise would be great!!

TadleyBaggie

No notice is required. If they did give notice, it might encourage some to spend up to the original limit to stop the limit being reduced.

Semple

Whilst it's certainly not good customer service, i'm doubtful that this would have been illegal. At the end of the day it's their credit limit to do with as they please.

Really though you need to read your account T&C's to see what their rules are for lwoering/increasing credit limits. You may find there's a clause saying they don't have to notify you.

bengal-stripe

CC limits can go up or down, depending on the information (good or bad) the bank has about you and your financial conduct.

JodiJ wrote: »

And this was decreased due to negative information from call credit file.

Banks get regular updates from Credit Reference Agencies about their customers. Has something nasty happened (a default maybe) that could have spooked them? Have you checked your file?

JodiJ wrote: »

Should they have given me notice that this was going to happen or something??

They usually won't give you notice, otherwise you might max-out your limit, thinking: "Let them whistle for their money!"

JodiJ wrote: »

I want to fight this as being a loyal customer

You can't "fight" it, but you can appeal the decision. The bank is perfectly within their rights, there is nothing illegal going on.

user1168934

Not surprised. Co-op are absolute idiots, they are the only brand on my blacklist. I stopped using anything that has Co-op associated with them several years ago when they refused a current accoount "because of (my) nationality".

I suggest you move on, find some other provider.

JodiJ

So all an update, I went on to my credit file and there is no default or nothing, credit file is excellent!! Why would they cut my credit limit from£2200 to £700??

And why would they say they did this based on information on my credit file when there is nothing on there????

m4rc

JodiJ wrote: »

And why would they say they did this based on information on my credit file when there is nothing on there????

They could mean the file they hold on you - your history of using he card. Or they could mean they don't like the look of your file for some reason - doesn't mean there is anything wrong with it just that they don't think you should have hat limit, it can be for any reason they choose as annoy as that is.

Nebulous2

They can pretty much do what they want. Which credit file did you check? You really need to check all three.

Pushing close to and over your limit may have been enough for them to decide you were too much of a risk and reduce their exposure to you. Does being overlimit show on your credit record you accessed at all?

premierfella

What m4rc said.

I personally would not waste too much further energy checking other credit files. As all responsible lenders do, Co-op no doubt have in place systems to monitor accounts on an ongoing basis. That will normally be the driver for a credit limit decrease (their mentioning credit files will be lazy shorthand for this).

Your options are to raise the issue with them to see if there is any way to reverse the limit reduction (unlikely to get a positive result), live with it or find another lender who is happy to take you on.

If your credit file is excellent the latter option is of course the way to go. An "excellent" credit file doesn't mean making minimum payments every month on credit card debt (not that I am suggesting that is what the OP is doing, just that limit cuts and living close to the limit often go hand in hand).

What Co-op have done is perfectly normal behaviour from credit card lenders - few would be silly enough to pre-warn of a limit cut if it is for credit reasons as of course customers in financial trouble would just draw the cash out, defeating the reason for the limit decrease in the first place.

20aday

The Co-Operative Bank probably felt by you going over your credit limit (even if it was a one off) that you were now a risk and acted accordingly.

I have seen previous threads here on MSE where people have made late payments/gone over limits on promotional rates and have faced having the deal revert to the card's variable APR but by being 'nice' to customer services at the relevant financial institute they've then gone onto having it reinstated.

If your credit reports are otherwise exemplary it might be worth your time looking at another credit card provider if The Co-Op won't reinstate your previous limit.

A couple of years ago I opened a Halifax credit card with a £1,000 limit. A few months later I opened a Very account and the Halifax wrote to me stating a change in my credit reports led to the limit dropping to £500.00.

cos_2

My credit limit was reduced from £4000 to £400 and I was given no indication why. I had no outstanding debt so it was ok, and I just cancelled the card. I'd used the card quite significantly prior to reducing the balance to zero.

I suspected they wanted to reduce their banking exposure.