Barclaycard limit reduction post covid

twiglet98

tp59bikes said:

I received the letter out of the blue and was of course taken aback and wanted to know why. I rang Barclaycard who advised it was down to new FSA(?) rules, borrowing due to COVID (I haven't) and Brexit.  I ensure I always pay more off the card than the lowest - in fact I had a zero balance!  They want more financial data to assess whether they can increase my credit limit from £250 (down from £10,000) to an affordable limit. As they increased my credit limit without question it seems like an exercise in financial data gathering. I was advised that all credit card companies will be following Barclaycard's lead. I believe that as much as I believed their stupid reasoning

I too received the letter reducing my credit limit, from £14,350 to £250 from 20 May.  I've had a Barclaycard for nearly 46 years and have not been asked for documents supporting proof of my income at any time.  The credit limit has been increased of their own volition over the years, I have never requested an increase.  I have made use of their 0% balance transfer offers several times.  Spending otherwise has been for unforeseen big expenses like vet bills, or car or appliance breakdowns, generally a bill perhaps in the hundreds, not thousands of pounds.  I took advantage of a 0% money transfer offer a couple of years ago to replace my car, spending about £1000.  The total balance has never gone over about £6k after a couple of balance transfers, I always pay more than the minimum, and have never been late or missed a payment.  I thought I was a pretty good customer.

Today I contacted them via webchat, quoted the letter which said, "Based on the information we have for you, we're going to lower your credit limit to £250... this is to make sure it's affordable for you".  I asked precisely what information did they have that prompted their decision.

BC:  I do apologize for the inconvenience but you can validate your credit limit by sending us your income documents in a prepaid envelop (sic).

Me: My account management has not been poor, I would like to know what information you have that suggests otherwise.  I believe I have been an excellent customer.

BC: I understand concern but we are FCE guidelines.

Me: Based on what history?  I am asking what triggered this extraordinary cut.

BC: We referred to information held by credit agency TransUnion.

Me: Do you have any understanding of why I am so surprised?  You are set to lose a long-standing customer.

BC: If you want I can log it as feedback for us.

Me:  I don't think you're grasping this...

BC: I have logged the feedback.

This account is so old it does not appear on Credit Karma.  I do have two other long-standing but more recent credit cards with lower limits, one has a small balance near the end of a 0% transfer and will be cleared in the summer, the other is clear.  I did not have to send proof of my income when applying  for these. 

My feeling at the moment is to keep the Barclaycard and max out the £250 each month, clearing the balance within the interest-free period.  They are then providing a service but making nothing out of me for doing so.  I may yet close the account.  It is all quite extraordinary treatment of long-standing customers, and leaves a very bad taste.

kaMelo

I just wanted to say thank you to @funkycredit for the heads up on how to change from a Platinum to Rewards Barclaycard.  That was a good spot and very simple to do.

twiglet98

To clarify, I have not been asked for documentary proof of income at any time IN THE PAST,  only now are they asking for copies of bank statements or payslips to enable them to review their decision, neither of which I intend to send..

frayedknot

It seems like it's people who rarely use the card or pay it off in full every month who are being culled. All that potential credit has to be allowed for even if it is not taken up so its a financial decision. I suppose this is not profitable for them compared to someone who owes them £6000 and only makes minimum repayments and pays lots of interest. Obviously they cant cut their limit to £250!. So it's only the prudent they are picking on, so think of it as a badge of honour.

But it's certainly making a lot of financially secure people angry, particularly when they get a limit of £250 which is what I had in the 1970s and is totally useless today. I don't know what they expected when they thought this was a good idea, people understandably feel devalued and unwanted  and even if it saves them a few bob it's total  a pr disaster. 

No doubt we'll be getting some smug, self-congratulatory adverts saying how much they've helped people in 'these difficult times' by withdrawing  credit and covering their greedy backsides.

Emmia

frayedknot said:

It seems like it's people who rarely use the card or pay it off in full every month who are being culled. All that potential credit has to be allowed for even if it is not taken up so its a financial decision. I suppose this is not profitable for them compared to someone who owes them £6000 and only makes minimum repayments and pays lots of interest. Obviously they cant cut their limit to £250!. So it's only the prudent they are picking on, so think of it as a badge of honour.

But it's certainly making a lot of financially secure people angry, particularly when they get a limit of £250 which is what I had in the 1970s and is totally useless today. I don't know what they expected when they thought this was a good idea, people understandably feel devalued and unwanted  and even if it saves them a few bob it's total  a pr disaster. 

No doubt we'll be getting some smug, self-congratulatory adverts saying how much they've helped people in 'these difficult times' by withdrawing  credit and covering their greedy backsides.

I pay in full and have had no cut - but for people paying just above the minimum, every month (even if they have substantial savings) I can see why Barclaycard has taken this action. 

My limit though, is (through choice) rather lower than some as I don't see a 5 figure limit as the "badge of honour" that some MSE members do.

[Deleted User]

twiglet98 said:

tp59bikes said:

I received the letter out of the blue and was of course taken aback and wanted to know why. I rang Barclaycard who advised it was down to new FSA(?) rules, borrowing due to COVID (I haven't) and Brexit.  I ensure I always pay more off the card than the lowest - in fact I had a zero balance!  They want more financial data to assess whether they can increase my credit limit from £250 (down from £10,000) to an affordable limit. As they increased my credit limit without question it seems like an exercise in financial data gathering. I was advised that all credit card companies will be following Barclaycard's lead. I believe that as much as I believed their stupid reasoning

My feeling at the moment is to keep the Barclaycard and max out the £250 each month, clearing the balance within the interest-free period.  They are then providing a service but making nothing out of me for doing so.  

They'll be happy with that. The merchant fees will more than offset the costs of hosting your account, provide a small profit and give them minimal risk.

SuperAllyB

noh said:

No letters for me either.
I have two Barclaycards both ex egg so therefore held for the last 10 years.

The Reward card is used regularly for household expenses and is paid off every month usually around 20% of credit limit used.
The Platinum card hasn't been used for 7 months prior to that a 0% offer was used. The credit limit on that is a five figure sum but less than £20k.
I have never had a current account with Barclays they have never asked me to or been able to verify my income.

Very similar here although Platinum has a lower limit and was applied for directly. No letters so far.

fredfuzz

I was contacted by Barclaycard earlier this year to inform me my limit was to be cu from £10500 to £250. This is barely enough to cover shopping and fuel for a month. I have twice submitted bank statements to prove my income but they said it did not  prove my income I wonder if it is because I am retired and on pension. Seriously there is no point in having a card with such a low limit

TurboTrace

My Barclaycard experience is similar to those reported. 
Had a credit limit of £11,800 which was suddenly reduced to £1,000.
What irked me more than anything else was the fact the email confirming the change arrived 4 days AFTER the change had been made! The letter arrived weeks later!
I complained and was fobbed off.  I asked to increase my limit to £3k. Was told no because my payments were late! Prior to the 2 late payments (2 days late) BC offered me this facility as I was awaiting funds from my pension which I was having a mare obtaining. I kept BC informed each month and they acknowledged this. To then be told my payments were late was a kick in the teeth! I cleared the balance in June just before they dropped my credit level. 
I also complained to FOS about them; they were next to useless. 
I tried to increase my credit limit in February but this was refused. I can try again in about 4 months. 
I can't apply for another UK credit card as I live in Spain. So I'm stuck with them and their shoddy treatment of me and thousands of others 😡

vacheron

fredfuzz said:

I was contacted by Barclaycard earlier this year to inform me my limit was to be cu from £10500 to £250. This is barely enough to cover shopping and fuel for a month. I have twice submitted bank statements to prove my income but they said it did not  prove my income I wonder if it is because I am retired and on pension. Seriously there is no point in having a card with such a low limit

The interesting question is did you regularly (and recently) exceed that £250 per month buying fuel and shopping on that particular card, or was it purely an example of how insignificant the new limit is? 

Reason for asking is that most people affected seem to be those with dormant cards, or who are irregularly using their cards for amounts which are insignificant compared to their available limit.

I'm curious to see how many people experiencing reductions have been forced to change their everyday spending patterns as a result of the reduction (or anyone who has been forced to repay a lump sum as their current card balance exceeds their new lower limit).