Responsible lending - or willy nilly?

smiff1985

Hi all,

I just wanted to gauge some opinion on recent activity of my Lloyd's Bank Avios Duo reward card. I'm signed up for paperless. I use the mobile banking app to track my balance.

I opened my account back in March 2015 and was offered a very good £9000 credit limit. As it's a reward card, I want to use it for daily purchases and then clear the entire balance each month. I do however currently have a medium balance on the card for which I'm using the 12 months interest free period to pay down, and eventually off. So for now I use it for all my daily spend and then pay all my disposable cash into the card each month, slowly bringing it down.

Anyway, in September 2015, I received a letter from Lloyd's saying that after review, they thought I was a good customer and increased my limit to £10500. Just last week, however, I found out (as they had not sent me a separate email) that my balance had been reduced to £7000. So in the space of 2 months, they had deemed me a good customer and increased my balance, only to 2 months later go below even the balance I was offered back in March (as they were being a 'responsible lender').

Is it really responsible lending to have such wild fluctuations in limits with very little notice (I only discovered as it was written on my November statement which I had to log in fully on the website to view. I received no separate communication about it.

Do I have cause to feel a bit concerned? I'm considering closing the account as why would I want to remain with a lender who seems to be free to have two big, completely opposing, changes within the space of 2 months.

Thanks.

grumbler

It doesn't matter what they say. "Responsible lending" is a common meaningless excuse that they don't need actually for any actions.
Limits normally get reduced without any notice to prevent customers increasing the balance before the reduction.

It's worth checking your credit files for some unexpected changes/errors as usually the decisions are made not only on the internal information they have.

Regardless, £7K is a very big limit that most people don't need actually for short-term borrowing. For a long term there are cheaper ways.

smiff1985

Oh don't get me wrong, I know it's still a good limit. I'm just very surprised by the behaviour and lack of proper notice.

I checked my files with all 3 and my credit score with each has either gone up or stayed the same. Also not noticed anything else out of the ordinary. I wonder if maybe related to me paying off one card completely last month.

It just doesn't sound very responsible to increase a high limit even higher, then to slash it 2 months later.

MABLE

smiff1985 wrote: »

Hi all,

I just wanted to gauge some opinion on recent activity of my Lloyd's Bank Avios Duo reward card. I'm signed up for paperless. I use the mobile banking app to track my balance.

I opened my account back in March 2015 and was offered a very good £9000 credit limit. As it's a reward card, I want to use it for daily purchases and then clear the entire balance each month. I do however currently have a medium balance on the card for which I'm using the 12 months interest free period to pay down, and eventually off. So for now I use it for all my daily spend and then pay all my disposable cash into the card each month, slowly bringing it down.

Anyway, in September 2015, I received a letter from Lloyd's saying that after review, they thought I was a good customer and increased my limit to £10500. Just last week, however, I found out (as they had not sent me a separate email) that my balance had been reduced to £7000. So in the space of 2 months, they had deemed me a good customer and increased my balance, only to 2 months later go below even the balance I was offered back in March (as they were being a 'responsible lender').

Is it really responsible lending to have such wild fluctuations in limits with very little notice (I only discovered as it was written on my November statement which I had to log in fully on the website to view. I received no separate communication about it.

Do I have cause to feel a bit concerned? I'm considering closing the account as why would I want to remain with a lender who seems to be free to have two big, completely opposing, changes within the space of 2 months.

Thanks.

I have at £15,000 limit on my card and has been at that level for years. Very rarely used but they now sent me an email offering BT for 18 months at 1.5 percent fee or to my bank account for 21 months also for a 1.5 percent fee.

I think they are trying to get me to use the card more.