Barclaycard reduced my credit limit by 97%!

jo5ephedward5

I just received a 'nice' letter from Barclaycard reducing my credit limit from £9400 to £250, and of course, no notice period it was effective from the date they write the letter which was a week ago!

I have a 999 credit rating, very good income, never missed payment, always paid double the min payment, and have had less than 50% credit utilisation for several years so I have no idea who their ideal customer is, but I clearly no longer fit the bill.

I've spoken with them this morning to get a little more information, but of course, they just fob you off, their rationale was it was a high limit and paying double the minimum is still considered a low payment, so they feel the reduction is appropriate...I could understand some reduction but over 97% for someone who can clearly afford it seems insane. 

My biggest concern now is that such a low limit will be a red flag on my credit file and I'm about to apply for a new mortgage, I've just closed the Barclaycard so fingers crossed it's closed before it affects me too much.

Robin9

Did you actually use it?

cymruchris

Many have received the same letter. If you've not been using it much in recent months, they probably want to allocate the available credit limit to someone that is. It doesn't really matter what your score is, as that's just a made-up number anyway. Credit card companies have £X amount of available credit split amongst all their customers. They have to have the finance in place to be able to pay the bills if everyone went out and spent up to their limit. If a customer isn't using their card much, and they have other customers that are requesting higher limits, and using their cards regularly, then it would make sense to move limits from those that aren't using them to those that are. Someone isn't entitled to large credit limits just because they are well off, it's just business. If you're not happy with it - close the account, and then open another with a different financial institution. 

jo5ephedward5

Robin9 said:

Did you actually use it?

It was used monthly for larger purchases and items I wanted additional protection on, as well as the odd balance transfer over the past couple of years.

jo5ephedward5

cymruchris said:

Many have received the same letter. If you've not been using it much in recent months, they probably want to allocate the available credit limit to someone that is. It doesn't really matter what your score is, as that's just a made-up number anyway. Credit card companies have £X amount of available credit split amongst all their customers. They have to have the finance in place to be able to pay the bills if everyone went out and spent up to their limit. If a customer isn't using their card much, and they have other customers that are requesting higher limits, and using their cards regularly, then it would make sense to move limits from those that aren't using them to those that are. Someone isn't entitled to large credit limits just because they are well off, it's just business. If you're not happy with it - close the account, and then open another with a different financial institution. 

I don't expect to 'entitled' to anything, and yes a credit score means 'nothing', but when they send a letter that refers to 'your credit score' as a point of reference, and that score they're referring to, whilst arbitrary is as high as it can be it seems a little strange to cut someone's limit so drastically.  My point was that it seems irresponsible of a financial institution to reduce a limit on a well-managed card with no notice period as I've had no time to plan or make other arrangements.  My grievance is the way they've dealt with it - would it have hurt to have reduced it by a sensible amount, or given a month's notice? 

As I said in my first post I have closed the account.

[Deleted User]

jo5ephedward5 said:

I don't expect to 'entitled' to anything, and yes a credit score means 'nothing', but when they send a letter that refers to 'your credit score' as a point of reference, and that score they're referring to, whilst arbitrary is as high as it can be it seems a little strange to cut someone's limit so drastically.  

That's not the score they're referring to.

cymruchris

jo5ephedward5 said:

As I said in my first post I have closed the account.

In terms of your own circumstances that's probably the best way forward. As a consumer, it's best to vote with your feet and take your business elsewhere. It's nothing personal - it's just the way they've chosen to operate their business model at the moment. There have been several threads here with exactly the same letter. It's easy to take it personally, as it feels a bit of an insult after managing the account so well for a long period of time. Credit in general is bound to tighten in the next year as more redundancies hit, and the economy struggles for a while, and I imagine we'll see more people coming to the forums with very similar letters. With your credit file as described, it could be a good time to check those eligibility checkers and see if you can pick up a new card with a decent offer in place of it, something like the Amex platinum cash back card for example. 

jo5ephedward5

Deleted_User said:

jo5ephedward5 said:

I don't expect to 'entitled' to anything, and yes a credit score means 'nothing', but when they send a letter that refers to 'your credit score' as a point of reference, and that score they're referring to, whilst arbitrary is as high as it can be it seems a little strange to cut someone's limit so drastically.  

That's not the score they're referring to.

I know they have their own score, but they're not asking people to check that - the letter says: "check your score with a number of credit agencies', and the only score the consumer has access to are the ones I've described which I know are different to the ones 'used' by financial institutes, but if they're directing consumers to a score to monitor their eligibility, and that score isn't reflecting an issue or concern they're clearly misleading people.  It's like saying we've lowered your credit limit, check your dishwasher and I've never understood it. 

Shakin_Steve

I'm half expecting this letter. I have a relatively low limit of £5000, but I hardly ever hold a balance of more than £150. I, too, use it for the odd bigger purchase (£700 for a week away and £600 for a laptop recently) but that is very seldom and it is settled in full each month. If they reduced my limit to, say, £500 I wouldn't take it personally, it's just business.

Shakin_Steve

I, like a good few people probably, acquired credit cards for various bonuses. I've got four and, to keep them ticking over, I put a quarter of my monthly spend on each and pay in full. As my monthly spend on food, fuel, etc amounts to less than £1000, none of them is going to make a fortune from me.

adamp87

jo5ephedward5 said:

Deleted_User said:

jo5ephedward5 said:

I don't expect to 'entitled' to anything, and yes a credit score means 'nothing', but when they send a letter that refers to 'your credit score' as a point of reference, and that score they're referring to, whilst arbitrary is as high as it can be it seems a little strange to cut someone's limit so drastically.  

That's not the score they're referring to.

I know they have their own score, but they're not asking people to check that - the letter says: "check your score with a number of credit agencies', and the only score the consumer has access to are the ones I've described which I know are different to the ones 'used' by financial institutes, but if they're directing consumers to a score to monitor their eligibility, and that score isn't reflecting an issue or concern they're clearly misleading people.  It's like saying we've lowered your credit limit, check your dishwasher and I've never understood it. 

The issue is you don’t know what they are basing the decision off but that’s never been known. It could be they have changed their criteria and you have too much credit against income for them, or it could be usage, or even they deem something a risk.

As you’ve said you’ve left so just forget it now. They aren’t misleading anyone there’s evidently something on your report that they don’t like anymore.