Why can't you reduce credit limits online

ems42

I am interested to know, why when applying for credit/overdrafts etc you can always apply online to increase limits through the accounts whether they are banks, credit cards on the online account yet there is no facility on any of these to request a decrease and you have to either phone a helpline to talk to someone to say the limit you are lowering to, or call into a bank and request a decrease, surely with all the online accounts that everyone has these days this facility should be automatic as well, would be interested to know what anyone else thinks about this , thanks :-)

[Deleted User]

You can with most of mine.

Have you tried sending a secure message?

System

If you had a lower limit it would cost you more if you went over it or failed payments, so there's no gain from doing that if you're disciplined

I think banks should allow you to set a limit /warning on yourself within the credit limit if it helps you budget (maybe phoning to ask for approval)

ParaJon

Hi, When I worked for a Bank I was asked this a lot about overdrafts etc

One of the main reasons was people didn't seem to understand that if they lowered the limit, they may not be eligible to reapply for that. Therefore lowering it could cause them distress in a few months. Another reason is security of OLB facilities as a decrease can be more detrimental to an increase. Another reason is mistakes. If someone lowers it and then thinks oh sugar I've gone to low a then can't get it back up to a desired limit again.

It's easier for a bank to decrease than increase limits. As opposed to re increase, they also use a decrease to reel evaluate a persons circumstances and maybe even as an excuse to remove the facility altogether

ems42

Hi thanks, yes I have asked in secure messages but always been referred to phone numbers with cards etc or required to call in if a branch in town,ParaJon I totally agree with what your saying but I do think that option should be available online everywhere, it's up to the individual if they have made the wrong decision, penalty clauses/interest amounts, isn't that where the companies make their money on higher interest companies - am I wrong in thinking that?

ParaJon

ems42 wrote: »

Hi thanks, yes I have asked in secure messages but always been referred to phone numbers with cards etc or required to call in if a branch in town,ParaJon I totally agree with what your saying but I do think that option should be available online everywhere, it's up to the individual if they have made the wrong decision, penalty clauses/interest amounts, isn't that where the companies make their money on higher interest companies - am I wrong in thinking that?

Costs of managing customer complaints and accusations of small print etc would significantly increase, also people using unplanned overdrafts etc can be bad for banks as its toxic debt which looks bad on their books, when you go into an unplanned overdraft and get charged £10 a day etc. banks use that information and have to send out letters, register defaults, leads get passed to branch advisers to call you to try and get you into branch to re-increase the facility. A lot of money is also spent on managing a customers unplanned overdraft and most of the time those fees turn into a complaint which the bank then has to pay either someone to manage or to refund and recoup no losses.

Also getting you into a branch or on the phone increases the chances of a facility being retained which is better for a bank in the long run, and also gives opportunity to cross sell other products.

When the bank I worked for trialed amended facilities online it was a complete failure due to people making even the simplest miss type but then being ineligibilge for any lending couldn't get the facility back and the complaining it "wasn't clear enough" or "didn't realise" which can then lead to loss of a customer etc.

chuckley

probably a security thing. calls are recorded and can be traced. online login's can't.