Barclaycard slashed my limit to 10% of what it was

mrmotivated

Hi all, 
I'm more annoyed than anything about it and it doesn't currently have an impact on finances but could have. 
So I have recently paid off every credit card, HP agreement and other small debts off to the value of about 10k. We used savings to just get rid of them all and now we're saving the monthly payments we were making into a pot to make us feel better about all that interest and minimum payments now in our bank. £520 per month we were paying out so thats a nice pot to save.

Literally 48 hours after paying off Barclaycard £2300 limit - Paid off £2000 in one go. They write to us saying we're changing your credit limit to £260. Seems to me like a childish thing to do (I KNOW it is not and a bank would do such a thing etc) but thats how it feels. The credit cars are now there for emergencies but as a customer of 5 years with them and NEVER missing a payment and NEVER going over limit and in the past we have made big payments off it then used it to pay for hoilidays, or when we're abroad etc I find it weird they would cut us down as soon as we clear the balance.

Any advice as to why they would and shoud i just close the account or leave it there to help build credit rating which should be improved as I am basically debt free.

Cheers

[Deleted User]

It's fine to manage risk and exposure.  You've obviously been carrying a number of debts for a while and they want to remove themselves from the picture.


As long as you gave a few other cards that you use regularly, you could cancel it if you want.

LordSomebody

The the same thing happened to me. I was carrying a hefty balance for a while, paid off £9k, and they cut my limit from £12,300 to £3,500.

I don’t mind though. They thought I needed that cut and based on the information they have, I can’t argue.

mrmotivated

I have carried debt but we have also paid off debt regularly - we bring home about 20k per month Net and only have 4k liability each month so I was a little surprised. I'll just close it then I suppose. My credit score is very good anyway so I suppose it's fair if that's how they do it - By score I meant health of the file I know score means nothing really) 

Thanks for the replies

[Deleted User]

Yes, they do it by reviewing your borrowing as a whole, not just with them.

The large income but ongoing debt will be a concern to many lenders, as it's very unusual behaviour.

D3xt3r5L4b

£20k per month yet have/had £10k+ worth of debts...

Fighter1986

It's because you ran the card close to it's limit for a prolonged period. This is a sign of debt stress in the eyes of many credit card providers. It might not always be debt stress that causes an account holder to maintain a balance close to their limit for a long time, but it more often is than isn't. 

I'd suggest closing the account. Having an account with such a low limit open now is probably going to limit the limits you're granted elsewhere.

Once the account shows as closed and settled on your credit file (takes four to eight weeks), apply elsewhere. 

Remember your next statement is likely to include rolling interest to be paid in full. 

born_again

Fighter1986 said:

It's because you ran the card close to it's limit for a prolonged period. This is a sign of debt stress in the eyes of many credit card providers. It might not always be debt stress that causes an account holder to maintain a balance close to their limit for a long time, but it more often is than isn't. 

I'd suggest closing the account. Having an account with such a low limit open now is probably going to limit the limits you're granted elsewhere.

Once the account shows as closed and settled on your credit file (takes four to eight weeks), apply elsewhere. 

Remember your next statement is likely to include rolling interest to be paid in full. 

As well, they will have picked up that the OP has cleared all other debts as well. They may be taking the safe option and cutting their risk.

Malkytheheed

Earning 20k a month and running ongoing CC debt and maxing out credit cards etc. Also you said you had savings, and yet were happily paying CC interest? Why??
Also if you are clearing over 20k a month with no debt you should be putting away way more than £560 a month as savings.  Most people suggest a minimum of 10%. Are you investing any of your money? Where is it all going? 

Sorry, but if I was a lender I would run a mile too. Just all seems really weird.