Aquacard credit limit reduced for no good reason

cdsheldon

Like others, I had a text message this morning to say my credit limit has been reduced to £1500 (from £3950) without notice. And yes, I too pay off the balance in full every month and have a good credit score. Such a pity, as I was just starting to use this card much more due to the demise of Tandem.

MiraculousM

I have a question. So, im one of those people that pay of my credit card in full after literally a day (when im able to). So say my credit limit is £500- if i bought something that is worth £400, i will go home and work out the difference and pay it off so my available credit returns to £500 again. There is no harm in doing this with Aqua right? I just clear the card as quick as possible

[Deleted User]

There's not much harm in terms of how aqua view you, but it's not a good strategy to build credit history, in the event you wanted to get a better card at some point.

vonsworld

MiraculousM said:

I have a question. So, im one of those people that pay of my credit card in full after literally a day (when im able to). So say my credit limit is £500- if i bought something that is worth £400, i will go home and work out the difference and pay it off so my available credit returns to £500 again. There is no harm in doing this with Aqua right? I just clear the card as quick as possible

What you are doing should be perfectly fine. I do this myself with several of my cards and have never had a problem. However Aqua do not always seem to behave in a logical manner, so it's difficult to be certain how they will view it.

MiraculousM

Deleted_User said:

There's not much harm in terms of how aqua view you, but it's not a good strategy to build credit history, in the event you wanted to get a better card at some point.

Thanks!
I got the card as a replacement for my tandem one as my credit is ok. Thank you though

Massuco

I've been using Aqua card since 2014 and I have to say that I have never had any problem, it started with a very low credit limit and by using and paying in full the statement every month I got a credit limit increase letter every 4 months until it reached 4450.00. This morning while checking my online banking I found the following message 'your credit limit became 1800.00 from 28th August'. It's disappointing the fact they did not send me a letter/e-mail/message/notice to alert the change of circumstances.
The good thing is that 'apparently' they still offer the fee free spending overseas and the little 0.05% cashback (little is better than nothing).

D3xt3r5L4b

Massuco said:

I've been using Aqua card since 2014 and I have to say that I have never had any problem, it started with a very low credit limit and by using and paying in full the statement every month I got a credit limit increase letter every 4 months until it reached 4450.00. This morning while checking my online banking I found the following message 'your credit limit became 1800.00 from 28th August'. It's disappointing the fact they did not send me a letter/e-mail/message/notice to alert the change of circumstances.
The good thing is that 'apparently' they still offer the fee free spending overseas and the little 0.05% cashback (little is better than nothing).

It’s 0.5% cashback not 0.05%

Dandytf

Is there any remote link to those who carefully manage to re pay in full each month.
That could be part of the reducing limits algorithm.

JGUK

Everyone who's had their limit reduced (including me) seems to have paid on time and used their card sparingly and within a rough 10-30% credit utilisation ratio, IE making a loss for Aqua, as others did, I closed my account and went elsewhere.

Not even sure what they're doing is allowed, but I'm guessing it must be.

jet01

I think the key point is the reasonably low credit utilisation ratio. New Day like all CC providers have to have finance in place to cover a certain percentage of their possible liabilities. Unused credit needs to be covered by them and increases their costs. This is potentially more expensive for them to finance in a recession when bad debt and credit utilisation rates will increase overall. It’s a commercial decision and totally legal. Its more profitable to utilise those funds to attract new customers with lower credit limits who carry a balance at 34% APR than it is to sit unused. Aqua have withdrawn the cash back card for new business already and I wouldn’t be surprised if they cut the cash back for existing customers or scrap it all together quite soon. 0.5% cash back isn’t sustainable in the long term given the current lower CC interchange fees.  

Other providers are also attempting to do the same by closing unused accounts and slashing credit limits. Several recent posts about Barclaycard doing exactly that over the last few months. Although Barclaycard seem to give most customers the option to keep their existing credit limit if they start using their card again. Which is what happened to me.  I think lots of other companies are likely to take similar measures in the coming months given the economic environment post Covid. They want to reduce risk and keep accounts profitable.