Halifax Clarity - credit limit lowered from £5000 to £500

Richey_

£5000 is actually quite a low limit, £500 is an exceptionally low limit.

Why not apply for the Santander Zero credit card which is very similar to the halifax clarity card

http://www.santander.co.uk/uk/credit-cards/zero-credit-card

Or appy for a Metro bank current account as they also do free European transactions. Then apply for an overdraft to go with it ?

https://www.metrobankonline.co.uk/bank-accounts/products/current-account/

If halifax don’t really want your business and see you as a risk (hence the major drop to limit their potential losses) just take your business elsewhere to somebody who does want you.

Roger1

PCN_advice_needed wrote: »

... it's a pain because if I'm abroad for work I can rack up £1500 - £2000 in expenses pretty quickly.

Are you travelling on business for yourself or for an employer?

If the latter, then you shouldn't be funding your employer's expenses. Get them to provide a card for you or ask for a suitable cash advance.

[Exception: if you want to earn miles, points or cashback, you may be happy to fund the expenses.]

adindas

PCN_advice_needed wrote: »

I've had a Clarity credit card for some years, and I was surprised to see that my credit limit had been lowered by them from £5000 to £500 a few weeks ago. I use the card when abroad for cash withdrawals and paying for things as there's no transaction charges. There was a small balance on it but I paid that off pretty sharpish.

On calling them, I couldn't get a clear answer - the person I spoke to put me on hold and spoke to the Lending department (apparently) who said it wasn't a change in my credit score with them, but it might have been something else.

Having registered with Equifax and a couple of others to get free credit score reports they all look healthy and I'm at a loss to understand how to get the credit limit raised again - my financial circumstances and spending haven't changed radically and it's a pain because if I'm abroad for work I can rack up £1500 - £2000 in expenses pretty quickly.

What's the best approach to finding out what data Halifax based their decision on, and if I need to what's the best way to follow the chain back to the original organisation which collected that data ?

Have you tried writing a letter to them ask to investigate further, nicely explain to them why do you think it might be a system error to reduce your limit. It is better even if you send them the copies of all CRAs reports you have got to save their time.

My personal experience with the problem like this call normally does not work as you are just talking with an agent who can not make a decision, risk averse agent, lazy to investigate further. Unless of course they are willing to direct you to people who could make a decision.

Talking with such kind of agent is just a waste of time as they will give you a generic answer and as such they just ask you to check your credit file, etc which you already know (based on your post, it all look healthy based on the report from CRAs)

You will never know it might be due to mistake in their system, and you have been wrongly picked up by the system. If you write to them, you will get people with higher authority who will invest time to investigate it.

But from the previous posts I have read a few people got their clarity card limit reduced because they hardly use it But it does not happen to me as I also have clarity card which I normally use it in the UK once in a month for a tiny transaction to keep it alive. I am using it for spending of a few hundreds pounds if I am traveling abroad.

bris

Card companies have a finite level of money they can lend on CC's. It could very well be they are near that limit so they can reduce what they will see as non profitable customers limits to free up funds they can lend elsewhere.


There will have been a purge which could be thousands of customers seeing limits they never use reduced to free up millions they can lend elsewhere.

chattychappy

bris wrote: »

Card companies have a finite level of money they can lend on CC's. It could very well be they are near that limit so they can reduce what they will see as non profitable customers limits to free up funds they can lend elsewhere.


There will have been a purge which could be thousands of customers seeing limits they never use reduced to free up millions they can lend elsewhere.

I have a £9600 limit which I never use. Because I never use it, I can't see how reducing my limit would "free up funds". I'm sure CCs are well used to dealing with ratios - ie building into their financing the fact that most people don't borrow up to the limits. If there was some kind of "run" on the CCs, they could always decline transactions.

Toddy2

Halifax did the same to me, I had a £3k limit on interest free, which was running near the limit. They decided to reduce my limit to £2k which pushed me over limit and back onto the higher interest rate. Hence I transferred.
Trying to get an answer was impossible! Good luck with yours...

YorkshireBoy

chattychappy wrote: »

I have a £9600 limit which I never use. Because I never use it, I can't see how reducing my limit would "free up funds".

Isn't it to do with Basel III Capital Adequacy? Cutting your limit would "free up funds" (AKA capital reserves) to lend to someone else, ie give two of you £4.8K each or 4 of you £2.4K each in limits, without them breaching capital adequacy rules.

So yes, the OP will be one of many (assuming there hasn't been a change in their CRA file monthly feed, or Halifax haven't changed their criteria for a certain segment of cardholders)...but many/most of them won't be posting on MSE to highlight the issue.

chattychappy

YorkshireBoy wrote: »

Isn't it to do with Basel III Capital Adequacy? Cutting your limit would "free up funds" (AKA capital reserves) to lend to someone else, ie give two of you £4.8K each or 4 of you £2.4K each in limits, without them breaching capital adequacy rules.

I don't think so because the limit isn't actually being used (or committed to being used).

I'm no banking expert, but I thought capital adequacy was more about deposit taking, ie how much of what you've taken you must keep "to hand" (for want of a better term). Again, I don't see how simply giving a credit limit to somebody has an impact on this - only when they spend and the bank has to advance the money (which may involve borrowing, too much of which could endager their ratio.)

BUT, I suppose it could be that if they are close to a critical ratio, they might prune limits not because they are unused, but because you might use them.

System

Whilst not a big limit, £5000 isn't 'quite a low limit'

Richey_ wrote: »

£5000 is actually quite a low limit, £500 is an exceptionally low limit.

qsk

Heng_Leng wrote: »

Whilst not a big limit, £5000 isn't 'quite a low limit'

Well, it really depends on whom you are talking to. Before you reply, check his username first