Barclaycard limit reduction post covid

MattMattMattUK

Andy81 said:

Mine is being cut from £11.5k down to £4250 just £250 above the £4000 balance after only doing a balance transfer onto it a month ago.
My concern is I don't want to move the money again so soon as this will look bad on my credit file yet in doing what they've done it's now pushing me to around 89% of the card credit utilisation which will also have a negative effect on my credit score.
Experian has me on 989 of 999, always paid just above the minimum, no CCJ's, never missed a payment or took a holiday even after Covid put me on the box for 2 months on SSP and this just feels like a real kick in the teeth.

As long as you keep paying the debt down it will not hugely matter in relation to future borrowing and your credit score is a meaningless number, ignore it.

Keep paying, clear the debt, other lenders see the full file and will make lending decisions based on their own criteria and evaluation of your circumstances. They are not that bothered by credit utilisation, they do dislike persistent debt.

phillw

onlyfoolsandparking said:
Obviously they are not a consumer, what is this queue you talk of?

I can't see negative interest rates coming anytime soon for us consumers,

And I agree, it comes to financial firms first. Hence a queue. If they have money sitting waiting to lend to you, then it's costing them money. By reducing everyone's credit limits they reduce how much they need to have to hand.

https://www.ftadviser.com/regulation/2021/02/04/banks-given-6-months-to-prepare-for-negative-interest-rates/

It might not be related, it might just be they are scared of people going crazy when everything re-opens. I am surprised we haven't seen this from more lenders.

kaMelo

Without wishing to defend Barclays, I'm sure they don't need me to do so, but they simply cannot win no matter what they do.
In the MSE article about the limits being cut, a later paragraph goes on to tell people they can complain if they think their limit was set too high and were negatively affected as a result. Indeed thousands of people received payments for this.

Barclays dish out generous credit limits, results in lots of moaning and complaints.
Barclays reduces limits to avoid negatively affecting customers, results in lots of moaning and complaints.   

Like I said they can't win whatever they do.    
I'm reminded of the old saying, "Be careful what you wish for.....it may just come true."

CRISPIANNE3

No sign of a letter as yet!

GrumpyDil

kaMelo said:

Without wishing to defend Barclays, I'm sure they don't need me to do so, but they simply cannot win no matter what they do.
In the MSE article about the limits being cut, a later paragraph goes on to tell people they can complain if they think their limit was set too high and were negatively affected as a result. Indeed thousands of people received payments for this.

Barclays dish out generous credit limits, results in lots of moaning and complaints.
Barclays reduces limits to avoid negatively affecting customers, results in lots of moaning and complaints.   

Like I said they can't win whatever they do.    
I'm reminded of the old saying, "Be careful what you wish for.....it may just come true."

Totally agree that they can't win. My limit has been reduced to lower than I would like. If it keeps being reduced as I cleardown the balance I may think about closing it.

Alex9384

OK, they are dumping thousands of loyal customers, but what kind of customers do they wish to keep?

People who wrote they haven't used their card at all for a long time - limits reduced

People who wrote they use their cards but clear their balance in full each month - limits reduced

People who wrote they use their cards and make more than minimum payments (bank makes money) - limits reduced

My initial credit limit as a new customer was £5000. In November 2020 I manually increased it to £6000.
I accumulated a 3k balance on the card while it was on 0% introductory rate, then paid off exactly £275 each month until cleared just at the end of the 0% period. I never paid any interest.

Now for the last 4 months, my monthly bills on my Barclaycard were £6, next month £12, this month £5. My limit has not been reduced. Am I the ideal customer they're looking for? It doesn't make sense to me.

If they receive monthly feeds from CRAs, I assume they see my spending on my other cards, which was (on my Amex) over £900, next month cca £850, next month cca £650, last month £500, always paid off in full, while at the same time I spent ridiculously small sums on Barclaycard, only to have an active direct debit, plus have it reported on my files that the card is being used.

Thrugelmir

Andy81 said:

My concern is I don't want to move the money again so soon as this will look bad on my credit file yet in doing what they've done it's now pushing me to around 89% of the card credit utilisation which will also have a negative effect on my credit score.

Finance companies do not use credit scores !   Debt is debt however you dress it up. 

Alex9384

One guy wrote he had over 10k credit limit, but his utilisation is only around 5%. Yet he paid over £300 in interest in the last year. His limit was reduced. Why would Barclaycard not want to keep a customer who paid them £300 in interest while not maxing out the card and always paying on time?

Thrugelmir

Alex9384 said:

OK, they are dumping thousands of loyal customers, but what kind of customers do they wish to keep?

Profitable ones.  Understand Barclaycard's credit card business model then the penny will drop. 

Alex9384

Thrugelmir said:

Alex9384 said:

OK, they are dumping thousands of loyal customers, but what kind of customers do they wish to keep?

Profitable ones.  Understand Barclaycard's credit card business model then the penny will drop. 

But did you read the rest of my post about my spending? In what way am I a profitable customer to them? It probably cost them more money to keep my account open than they make off me. If my monthly bill is £6, next month £12, next month £5, how much money they make? Yet they keep my £6000 limit.

The guy who paid them £300 in interest in the last year (didn't go anywhere near his card limit) has the limit reduced to £250 so they basically want to get rid of him.

Let's see if I receive a letter in the next few days...