Credit Card Limit Increased Automatically

Williams717

I have a credit card with a well known credit supplier, which was opened initially for £800 a few years ago. Without asking me or me knowing until it was done they Increased my limit to £1200 when I had already maxed the credit card out. Is this bad practice on their behalf? The balance on this card is maxed at £1200 and I've been struggling to pay it back for years, and have incurred multiple charges and missed payments elsewhere. 

Any advice? Or similar experience? 

Marchitiello

Usually when you apply for a credit card, within the application form many providers have an option about automatically accepting credit limit increases. In other cases, they would normally comunicate their intention of increasing it giving the customer the options to opt out. With regards to the account being maxed out/struggling to pay it, you may want to write a specific post in the Debt free wannabe section 

emmajones1976

In the meantime, contact them and ask them to put it back down.

jimjames

There seems to be a pattern of your posts where you are trying to blame the bank for your actions. You also had an overdraft so surely it's your responsibility not to spend money you don't have. £1200 isn't a high limit so I don't think that's the bank's fault.

https://forums.moneysavingexpert.com/discussion/6311233/overdraft-mis-sold#latest

Nick_C

Well if you have already spent up to the new limit, you don't want them to reduce it again now as you would have to pay back the £400.

It really sounds as if credit cards are not for you.

Stop spending on this credit card.  Pay off as much as you can every month to reduce the interest as much as possible.  

If you really need a credit card to help you to budget, then take out a second one, but only use it when you absolutely have to, and pay off the full balance every month so you don't pay interest or fees.

Sensory

Williams717 said:

I have a credit card with a well known credit supplier, which was opened initially for £800 a few years ago. Without asking me or me knowing until it was done they Increased my limit to £1200 when I had already maxed the credit card out. Is this bad practice on their behalf? The balance on this card is maxed at £1200 and I've been struggling to pay it back for years, and have incurred multiple charges and missed payments elsewhere. 

Any advice? Or similar experience? 

Some providers allow you to choose whether increases are automatic or require manual approval. I like automatic credit limit increases; it shows you're trustworthy... usually. Unfortunately in your case, perhaps your provider was trying to help you avoid going over your limit, but instead of treating the extra £400 as some breathing room, you maxed that out too. If you were in dire straits and absolutely needed to spend that extra £400, then the increased credit limit only helped you by reducing fees; however, it sounds like you're blaming your additional spending on an increased credit limit. It is bad practice to max out any credit limit; even if you can pay it off, it's better to spread borrowing across several limits.

If your provider was preying on your lack of financial discipline and experience with credit to maximum their own profits, then yes, I would consider it unethical and exploitative.

Based on your experience with your NatWest overdraft, and now this credit card, you need to learn financial discipline, especially with credit facilities. Try to find a card for balance transfers to reduce further charges. Learn to budget and not treat credit as extra money for spending on luxury (i.e. non-essential) purchases. Whatever your net monthly pay is, deduct all bills and obligations (e.g. rent, utilities, debt repayments) from that figure. Any annual payments should be divided by 12, and non-monthly payments should be divided by [12 / number of payments a year]. Then whatever is left is what you have for the rest of the month for everything else (e.g. food and supplies). Many costs can be reduced or eliminated, such as phone/internet bills, TV licensing, eating out, subscriptions/memberships, haircuts, clothes etc.

Once you pay off your unsecured debts, just avoid credit completely if you're tempted by it. Credit must not be relied upon on a regular basis as it's unsustainable and will spiral out of control.

Head over to the debt-free wannabe board for further advice.

EssexHebridean

Williams717 said:

I have a credit card with a well known credit supplier, which was opened initially for £800 a few years ago. Without asking me or me knowing until it was done they Increased my limit to £1200 when I had already maxed the credit card out. Is this bad practice on their behalf? The balance on this card is maxed at £1200 and I've been struggling to pay it back for years, and have incurred multiple charges and missed payments elsewhere. 

Any advice? Or similar experience? 

Best advice I can give is to echo the above - the DFW board on here is the right place for you. I'll also suggest that in the future you actually look at your account statements for cards as had you done so you would have realised you had spent over your old limit. I'll venture a guess also that you're paying high interest on this - £800 tends to be the sort of limit given on "poor credit" cards. You need to stop spending on it, and make a plan to actually pay it down. Again, the DFW board can help here. 

Ebe_Scrooge

Just because you have access to credit - whether a credit card or an overdraft - doesn't mean you have to use it.

Williams717 said:

Any advice?

Yup - stop spending what you can't afford, it really is as simple as that.  And stop trying to blame others for your lack of self-discipline.

Sorry, this sounds really harsh.  But you've just joined this site, and made 2 posts both of which are in very similar veins.  The DFW board can be very helpful in trying to pinpoint the cause of your overspending, and help you to reduce your outgoings.