MBNA reduce credit limit under surprising circumstances

JustBee

So I've been with MBNA for just over a year and it was clear they weren't very good handling my account as they kept making errors and the online service would be really hit and miss and never seemed to work/function properly. I decided when I'd paid off what I owed them I'd close the account and move on. I have a good credit rating with the credit agencies and I've never been turned down for any credit cards/loans in the past.

Anyway, I rang MBNA to close my account after paying what I owed them and the credit limit was £2,200 which was what it has always been since I opened the account. I was asked why I wanted to close it so told them I wasn't impressed with their services and didn't want to be with them anymore. I asked them to make sure their data shares with the credit agencies was adjusted accordingly and thought nothing more of it.

I just tried to apply for another credit card with another bank and they told me to check my Equifax account and that they would have to decline my application. When I checked Equifax, MBNA had sent a data share closing the account/settled but had put the credit limit showing as £500. At no time did they ever write to me or speak to me to inform me that they were reducing the credit limit and hows this.......my account was closed with them a couple of days before they sent the data share and the account was showing my credit limit as £2,200.

I feel like they've done it on purpose to cause me problems getting a credit card elsewhere. I have a balance on something I wanted to transfer but it's £1,000. I have statements to prove my account with them has always been £2,200, surely they can't be allowed to drop it without notice and show that on the last data share with a credit agency?

I'm about to get in touch with the ICO and the FCA. I've put in a dispute with Equifax.......just wondered if anyone else has had something similar occur and how they dealt with it!

[Deleted User]

They haven't done it on purpose to cause you problems. Corporations don't have vendettas against individual customers.

Some lenders have a practice of lowering limits to avoid any significant future CPAs or delayed charges going through.

Your decline will more likely be due to your wider circumstances.  The fact that your MBNA limit was very low suggests your history may be thin or a little patchy at best.

zzyzx1221

There is nothing to take to the ICO or the FCA here (and the FCA don't take individual complaints from consumers anyway).  They can drop a credit limit without warning.

There is no reason to believe this has been done to be vindictive.  TSB did the same with me when I closed a credit card account with them last year, on good terms.  They simply dropped the credit limit to £200 on account closure for some reason.  It has not stopped me from getting credit elsewhere so I suspect that there are other reasons for your decline.

JustBee

But how can they drop it when I'd closed the account? There was no longer any account to have any credit limit?

Puddles83

JustBee said:

I'm about to get in touch with the ICO and the FCA. I've put in a dispute with Equifax.......just wondered if anyone else has had something similar occur and how they dealt with it!

Wouldn’t bother wasting your time - neither of these bodies deal with complaints like yours.

To unpack what you’ve written… you’re basically unhappy that you haven’t been able to get a new credit card, and feel that is MBNA’s fault because they’ve reported a credit limit decrease to a CRA (btw… is the reduction reported on the other CRAs?)

Well, it isn’t - credit card companies are free to reduce credit limits at any time… see the massive thread about Barclays at the moment.
Also, a credit limit reduction before closure isn’t really going to cause a rejection - it’s more than likely that you simply don’t match the criteria that the company you applied for have - and they aren’t obliged to say what that criteria is.

Ultimately - MBNA aren’t being vindictive (do you really think a huge company like that has a personal grudge against you and has conspired accordingly?????) … it’s not their fault you got rejected. Move on and apply to another company if you really need another card.

zzyzx1221

JustBee said:

But how can they drop it when I'd closed the account? There was no longer any account to have any credit limit?

It would have been dropped as it was closed.  Let's say 1 nanosecond before they closed it for the sake of argument.

JustBee

Thank you all for helping me put this in perspective. I got a bit paranoid there! Typical, it was Barclays that rejected me and looking into what they've been doing after reading here, I'm glad ha! I'll just try elsewhere, yes!