Very Catalogue Credit Limit

Barney15c

Not Credit Cards but Catalogue Credit Account.
Can someone explain the logic behind this...
I built up a £1800 balance with a £2150 limit which was then raised to £2850.
When i got my lump sum i paid all my debts and mortgage off and am completely debt free. This also included clearing my catalogue debt of £1800.
I just received an email from very saying that my credit limit has been cut from £2850 to £500.
I'm not particulary bothered by this as i am never going to run up a debt like this ever again, but i am curious why they dropped it by so much, what would be their reasoning to cut it by so much  when the debt has been completely cleared.
As i say more curious than anything else.

Brie

Because they are being a conscientious lender?  Because they see you aren't needing the credit and are cutting their exposure to you running up another debt?  

I had a similar thing with Barclaycard - after 30 years of it going up up up it was happily sitting at a limit of about £18k which I didn't use for a couple of years and they squashed it down to £1400.  Only time I use it now is when there's some event that I can get early access to via Bcard.  

Well done on nuking your debt btw!

MorningcoffeeIV

Barney15c said:

I'm not particulary bothered by this as i am never going to run up a debt like this ever again, but i am curious why they dropped it by so much, what would be their reasoning to cut it by so much  when the debt has been completely cleared.
.

A history of over borrowing and tightened lending criteria in a difficult economy.

NoodleDoodleMan

Very offer a 20% discount for new customers - and this includes some iPhone models - a nice little earner if you need a new iPhone.

th081

Barney15c said:

Not Credit Cards but Catalogue Credit Account.
Can someone explain the logic behind this...
I built up a £1800 balance with a £2150 limit which was then raised to £2850.
When i got my lump sum i paid all my debts and mortgage off and am completely debt free. This also included clearing my catalogue debt of £1800.
I just received an email from very saying that my credit limit has been cut from £2850 to £500.
I'm not particulary bothered by this as i am never going to run up a debt like this ever again, but i am curious why they dropped it by so much, what would be their reasoning to cut it by so much  when the debt has been completely cleared.
As i say more curious than anything else.

You was probably in their high risk of default category and when you paid it back they decided to reduce their risk 

chanz4

longterm debt distress, then paid off they would lower the limit to prevent

Exodi

NoodleDoodleMan said:

Very offer a 20% discount for new customers - and this includes some iPhone models - a nice little earner if you need a new iPhone.

Does anyone ever 'need a new iPhone'.

Congrats on paying off the debt with your lump sum OP, I'd be grateful they've reduced the temptation - isn't the interest a Very account like 50%+?

Stuart_W

You're absolutely right not to be worried about it - they are doing the opposite to me. Ridiculous credit limit and constantly pushing through offers (£50 off a £100 order if you buy now pay later etc). They must keep hoping I forget to pay in 12 months so they can charge mega interest, but I never forget and still the offers keep coming. They have upped the interest rate to north of 50% APR recently, but interest free is still interest free so the rate is irrelevant. I always pay off a few days before it's due on a cashback credit card. 

Keep the account open and see what they offer you in time. If you get a discount tied to Buy Now Pay Later you can still pay it on the normal bill and you still get the discount. (Just don't let the minimum payment amount of £0 on the bill fool you in to forgetting about the debt)