Credit limit cut

Grumpy_Old_Duffer

I've been with my credit card for 10+ years. I've paid the card off every month in full by variable DD. My credit score is 995 and has always been high. I have not undertaken any further debt/borrowings in the last 10+ years. My income has increased by £5k in the last year. I've been retired for 10+ years. 

Why would my CC company reduce my limit from £6.5k to £1.7k, and will only offer to reduce it further without any option to increase it, when I've challenged them on the phone?

PUZZLED! 

lr1277

In my view, credit limit is based on income and expenditure. Have you told your card company about your increased income? Is it a reliable source of income or variable? What are your expenditures? Do you have a mortgage to pay?

Edited to remove a line and add the following paragraph. The other angle might be that credit availability is tightening for many institutions. Also increased rates don't help institutions with increased interest payment nor householders with mortgages because of increased mortgage payments. Approximately what percentage of your old limit were you using? 10%, 30%, 50% or some other ustilisation figure. Some suggest if you are not using your credit facility in a shall we say useful way, card companies will reduce your limit to give themselves more breathing oom.

The following may work: Let your card company know about the increase in your income and the source of that increase. Also inform them about payments like mortgages etc. They may change their mind.

MorningcoffeeIV

Grumpy_Old_Duffer said:

I've been with my credit card for 10+ years. I've paid the card off every month in full by variable DD. My credit score is 995 and has always been high. I have not undertaken any further debt/borrowings in the last 10+ years. My income has increased by £5k in the last year. I've been retired for 10+ years. 

Why would my CC company reduce my limit from £6.5k to £1.7k, and will only offer to reduce it further without any option to increase it, when I've challenged them on the phone?

Tightened lending criteria, increased risk, unused credit, cost of lending, shift in customer focus....

born_again

If you are not using the limit, then they are both reducing your risk profile & their exposure to debt.

MrFrugalFever

I have had exactly the same with Barclaycard last month. They basically said there’s nothing I do or say that would reverse their decision and I could attempt to apply for an increase in 30 days time. I offered to send payslips, p60’s, savings accounts statements but to no avail.

It’s been 30 days and I’m greeted with the same message as you (can only reduce not increase)! So therefore, I have maxed out the credit card to within £10 of the limit and either will pay it off and stop using it until they give me a sensible limit again or close the account. The most disappointing thing about it, is that it’s their Avios points card which is a real benefit to me.

Meh.

CliveOfIndia

born_again said:

If you are not using the limit, then they are both reducing your risk profile & their exposure to debt.

This is the most likely reason.  Basically, there is a cost involved in giving you a line of credit, added to which a lender has a finite amount of credit they can dish out.  If you're regularly using only a small proportion of your available credit, they'll cut your credit limit and re-allocate it to someone else who will use it (and in so doing, earn them some income from merchant fees).

This is in no way meant to insinuate that you should start maxing out the card or buying things you don't need or can't afford!

And you can safely ignore the score dished out by the credit reference agencies.  It's seen by no-one except yourself, and forms no part of lending decisions.

wiseonesomeofthetime

I am surprised four of my cards have not severely reduced my available credit limit as I don't spend more than about 3% of the limit on each, in any given month, and always PAY IN FULL, when I do use them.

My cards are mainly for travel or emergency use. If I'm not travelling, or experiencing an emergency, their activity is just enough to keep them "live". 

[Deleted User]

Just going by your username - your age can also be an issue they consider.

HillStreetBlues

My mother has a Barclaycard since conception (when it started as a chargecard)
She had increases from time to time over the years, but she seldom used it (could go years)
About a 12 months ago they reduced her limit to £200

Marchitiello

being retired / older is not a good factor for unsecured credit lines like a credit card. Unfortunately the risk profile is affected by age and as you get closer to the current UK life expectancy (reported on some site to be 78.7 years old) than your risk profile increases and with this your available credit line will be lowered 

martinbainbridge1975

makes me think i need to start and use my card, like those above mine is used for the odd purchase and always paid off in full