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Very Catalogue Credit Limit

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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.

Comments

  • Brie
    Brie Posts: 10,754 Forumite
    First Post Photogenic Name Dropper First Anniversary
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    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!
    "Never retract, never explain, never apologise; get things done and let them howl.”
  • MorningcoffeeIV
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    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
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    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
    th081 Posts: 132 Forumite
    First Post First Anniversary Combo Breaker
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    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
    chanz4 Posts: 10,923 Forumite
    First Anniversary Name Dropper First Post Xmas Saver!
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    longterm debt distress, then paid off they would lower the limit to prevent
    Don't put your trust into an Experian score - it is not a number any bank will ever use & it is generally a waste of money to purchase it. They are also selling you insurance you dont need.
  • Exodi
    Exodi Posts: 2,928 Forumite
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    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%+?
    Know what you don't
  • Stuart_W
    Stuart_W Posts: 1,746 Forumite
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    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) 


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