Halifax reduces credit limit - can't figure out why!

muhandis

Hi,

I have a 0% Halifax credit card (£2,500 limit, £2,350 balance, about 15 months to go). I got a letter from Halifax yesterday which informed me that they have reduced the limit to £2,400 with a generic reason given that "we review spending regularly to ensure that the limit stays appropriate blah blah".

I've been paying on time, have a good credit history (no defaults, late payments, etc etc) and have 3 other 0% cards on which I'm carrying a balance, a (usually nil balance) Clarity card for travel and a NW Select card (paid in full every month) for the cashback.

The only reason that I can think of as a trigger for this happening is that I recently (a month ago) started matched betting and have been using a new Halifax reward account solely for this purpose. So the only payments in and out of this account are to/from bookmakers and occasionally from/to my other current account.

Could this be a reason at all?

Thanks,

K

[Deleted User]

It could. But so could cost of funding, size of book, change in risk criteria, availabe credit elsewhere and so on.

muhandis

True.

I guess it's the fact that LBG (Halifax+Lloyds) are the one bank that have never ever rejected any of my applications for a credit card or current account which makes this 'downgrade' a bit hard to accept

Deleted_User wrote: »

It could. But so could cost of funding, size of book, change in risk criteria, availabe credit elsewhere and so on.

Superscrooge

I had a similar experience with the credit limit on my Bank of Scotland CC being reduced. I think they were spooked by me taking on extra debt on other credit cards.

On the back of the letter from BOS regarding interest rate changes, one of the factors listed that impacts credit rating is 'high risk transactions (such as gambling) so that might be the reason?

Doctor_Duke

Don't worry this is usual for LBG. Something to do with the computer system risk profiling. As others have said a number of reasons could cause this including the most recent monthly feed to them from the CRA. This is happened to me a number of times over the years but after a period of time following closure I have always been able to open credit cards with LBG with good limits.

Huskyrunner

its nothing you have done its called managing risk.

Banks and credit card companies will do this from time too time. My oh had a credit card she owed 3-4000 on, her limit was about 8000, as she wasnt paying it off in full every month the credit card company slowly dropped her limit.

It will be in the credit card companies terms and conditions that they can do financial reviews from time too time and they may lower limits.

YorkshireBoy

muhandis wrote: »

I have a 0% Halifax credit card (£2,500 limit, £2,350 balance, about 15 months to go). I got a letter from Halifax yesterday which informed me that they have reduced the limit to £2,400 with a generic reason given that "we review spending regularly to ensure that the limit stays appropriate blah blah".

The only reason that I can think of as a trigger for this happening is that I recently (a month ago) started matched betting and have been using a new Halifax reward account solely for this purpose.

I don't think gambling from a current account is the reason. More likely it's 94% credit card utilisation, perhaps coupled with CRA monthly feed data.

Anthorn

muhandis wrote: »

Hi,

I have a 0% Halifax credit card (£2,500 limit, £2,350 balance, about 15 months to go). I got a letter from Halifax yesterday which informed me that they have reduced the limit to £2,400 with a generic reason given that "we review spending regularly to ensure that the limit stays appropriate blah blah".

I've been paying on time, have a good credit history (no defaults, late payments, etc etc) and have 3 other 0% cards on which I'm carrying a balance, a (usually nil balance) Clarity card for travel and a NW Select card (paid in full every month) for the cashback.

The only reason that I can think of as a trigger for this happening is that I recently (a month ago) started matched betting and have been using a new Halifax reward account solely for this purpose. So the only payments in and out of this account are to/from bookmakers and occasionally from/to my other current account.

Could this be a reason at all?

Thanks,

K

Gambling. There is a reason why Optimal Payments touts its Neteller prepaid card for gambling and you discovered that reason.

The other reason for Lloyds Banking Group could be that you're only paying the minimum payment on one or more of their cards and they don't like that at all. But in that case you would probably have received a letter detailing how long it would take to repay the balance with only a minimum payment and a table detailing how much quicker it would be paid off for different amounts paid in. It's comes across as polite, non-binding advice but if it's ignored Lloyds start their mysterious curtailing of accounts which usually leaves the victim puzzled.

Overall though, gambling!

Ben8282

This credit limit reduction is very small so I don't think they have become seriously spooked.
I think this should be taken as an advance warning of what is likely to continue to happen if you don't do something to reduce your balances. If this is stoozing debt then forgo some interest and pay some of it off.
If it is genuine debt, then increase the repayments above the minimum as best you can.

MABLE

Ben8282 wrote: »

This credit limit reduction is very small so I don't think they have become seriously spooked.
I think this should be taken as an advance warning of what is likely to continue to happen if you don't do something to reduce your balances. If this is stoozing debt then forgo some interest and pay some of it off.
If it is genuine debt, then increase the repayments above the minimum as best you can.

I have stoozing debt of about £7000 and received one of those polite letters about only paying the min payment. However in my case at the time I had a promotional offers on the Avios card of 14 and 12 months for BT's and money transfers. Now they revised the offers and now have halved the fee from 3 to 1.5%. So based on that they cannot be that concerned in my case.

Also I was paying 2% back per month but they then said you need now only pay 1%.

muhandis

It is stoozing debt and the irony is that this happened just as I had started to unwind all my stoozing debt as I'm finding it increasingly difficult to justify the effort for the return that I get after the latest round of interest cuts.

Ben8282 wrote: »

This credit limit reduction is very small so I don't think they have become seriously spooked.
I think this should be taken as an advance warning of what is likely to continue to happen if you don't do something to reduce your balances. If this is stoozing debt then forgo some interest and pay some of it off.
If it is genuine debt, then increase the repayments above the minimum as best you can.