My credit card limits reduced to £100 - why?

enginestar

I had 2 credit cards.
1 with £8000 limit and the other £14,000.
I never use my credit cards - only maybe 3-4 times a year - like when booking for a holiday or buying something expensive.

A few days ago, I got messages saying that my limits were reduced to £100.
OMG. I haven't done anything!

I've tried calling - but they have a looong wait.
Before getting onto a queue to speak to someone, you have to go through 100 options and questions and typing in your card number - it's a massive pain.

In the past, when you get an agent who can't handle your query... mysteriously they cut you off and you have to call again.

What do I do?
Why would they take such actions??

I forgot to add: recently I paid bills of £8000 and £4000 on one of the credit cards (paid off after 3 days - the quickest I could do).

I don't think I'm a bad customer. Are they penalising me for not letting them milking and making money from me?

I don't actually like having credit cards... but for payment protection would always want to have.
Where can I get a new card with a high limit?
I don't think I've got a 'good credit rating' - simply because I never like getting into debt!

Any advice would be great.

Thanks.

PS As far as I know... one can build up their credit rating by using a high interest credit card and paying back. I don't really want to play that game. I personally think it's a disingenuous system for all parties involved.

lr1277

Sorry can't help with your reduced limits.

However if you want suggestions of alternative cards, you should tell us what cards you already have.

I don't know if income is an issue for you, but you need to check you meet the minimum income requirements for your chosen card.

You could type into Google:

[card name] credit card minimum income

I also find the 'finder' site useful for information about credit cards. To find it, type into Google:

Finder credit cards

HTH

MattMattMattUK

enginestar said:

I had 2 credit cards.
1 with £8000 limit and the other £14,000.
I never use my credit cards - only maybe 3-4 times a year - like when booking for a holiday or buying something expensive.

A few days ago, I got messages saying that my limits were reduced to £100.
OMG. I haven't done anything!

I've tried calling - but they have a looong wait.
Before getting onto a queue to speak to someone, you have to go through 100 options and questions and typing in your card number - it's a massive pain.

In the past, when you get an agent who can't handle your query... mysteriously they cut you off and you have to call again.

What do I do?
Why would they take such actions??

I forgot to add: recently I paid bills of £8000 and £4000 on one of the credit cards (paid off after 3 days - the quickest I could do).

I don't think I'm a bad customer. Are they penalising me for not letting them milking and making money from me?

I don't actually like having credit cards... but for payment protection would always want to have.
Where can I get a new card with a high limit?
I don't think I've got a 'good credit rating' - simply because I never like getting into debt!

Any advice would be great.

Thanks.

PS As far as I know... one can build up their credit rating by using a high interest credit card and paying back. I don't really want to play that game. I personally think it's a disingenuous system for all parties involved.

Your credit limit represents a large potential liability, card companies are happy with this when the customer makes regular transactions which generate revenue for them even if that revenue is small. You rarely do so it is not profitable to offer you cards with those higher limits. Is is not about penalising you, or being unable to "milk" you, you are just not a viable customer with limits of those sizes.

Credit ratings are meaningless, ignore them. 

Why not get a card with good rewards or cashback, spend everything you can on it and get something back for your spending, pay it in full every month after the statement is issued and you will never incur interest.

elsien

I had similar with one of my credit cards because I barely used it. The answer is to start using it more and then asked for the limit to be increased again. 

It won’t cost you anything because if you use it for more frequent smaller transactions and still pay back each month, you’re not paying interest but they are getting the fees from the businesses you are trading with. 

Because it does beg the questions to why you need such a large limit on it if it’s not being used.

I also find your use of the phrase “milking” you strange. They are a business providing a service. If they don’t make money, they close. Any business not making money from their customer is likely to reconsider whether they want them as a customer. If you don’t like it, then go elsewhere.

DullGreyGuy

enginestar said:

I don't think I'm a bad customer. Are they penalising me for not letting them milking and making money from me?

In the binary world of good and bad you are a fairly bad customer. You may not be a bad debtor but you are generating almost no income for them but still they have to service your account, have staff ready to take your calls, have the reserves to payout the money if you do make one of your rare transactions and all the transactions you do make are on what you consider to be the riskier purchases. 

A bank would much prefer someone who puts all their spending on the card every month, even if they pay it off in full each month. That way they are making their thin margin on each and every low risk/ high volume transaction as well the occasional splurge on bigger purchases.

Unless you want to appeal the decision there is little point calling them, they won't tell you why they've reduce the limit but give you some generic script about that they periodically review each customer and adjust limits based on information they receive from internal and external sources (eg credit reference agencies, CIFAS etc). They'll recommend you go check your CRA record 

CliveOfIndia

enginestar said:

I never use my credit cards - only maybe 3-4 times a year

There's a good chance that this is the reason.

As others have said, even if you repay your card in full every month, so you pay no fees or interest (which is what you should always aim to be doing), the bank will receive a nice steady income stream from the fees they charge the retailer every time you use the card.  If you're not using the card they're getting no income, but they still have to bear the costs associated with providing you with a credit facility.

Also, the bank doesn't have an unlimited amount of money - there's a finite amount of credit they have available to lend to customers.  If you're not using the limit they've allocated to you, they'll reduce your limit and give it to someone else who will use it.

Although, please don't misinterpret that statement as meaning you should go out and rack up as much debt as possible !

WillPS

Your card issuers will have a certain amount of float they can allocate in the form of credit limits . If you're sat on a 5 figure limit but barely use 3 then that's hardly a good use of that finite resource.

Remember you're dealing with a business, not being 'punished' or rewarded - their end game is to make money from their customer base.

Brie

You say you have 2 cards but don't say with whom.  If they are with the same bank then they will look at the credit limit together and reduce it according to use, potential income and how much they believe you can afford.  I think they are likely with the same bank or same banking group to have reduced the limit to the same low amount at the same time.  

So I would give it a few weeks for all this information to get recorded on your credit record and then apply for a single card with a different banking group.  So if yours were with Barclays maybe Santander or MBNA.  Barclays reduced my limit from about £18k to under £2k because of affordability apparently.  But Santander and MBNA never have so I expect they are able to be a bit more generous.  But that's my guess.  

paul_c123

Normally a credit limit dropping to £100 from a large amount, is an indication they're either exercising the option to close the account and withdraw the service from you shortly; or something adverse has appeared on your credit report which they have actioned (for example, an active CCJ). Worth doing a credit report check for yourself, to see if anything weird is now on it that you were unaware of.

enginestar

Guys, thanks for all replies. I had no idea there were replies to my post!
I called the bank (the cards are both Barclaycard) yesterday.
They said there was a problem reported by Experian.
I open a free account with Experian and get my credit score: 999, 8 positives and 0 negatives.
I call the bank again. They tell me they got notice from Experian that there was an adverse occurrence (or something to that effect) on my name. They told me to ask Experian 'what are they reporting on'? They said this will give me the answer.

I called Experian. After giving all my details and verifying on the phone who I am, I got a message saying they don't want to talk to me because I am not a premium member.

I don't get it. What am I supposed to do?

I've sent them a complaint message.

Anything else I can do?

PS: in regards 'milking' and the banks being a business and needing to make money etc... yes, yes, all agreed. I get that. I just don't like the nature of their business and how they make money in our world. But that's a different topic I guess. 🙂

Nasqueron

enginestar said:

Guys, thanks for all replies. I had no idea there were replies to my post!
I called the bank (the cards are both Barclaycard) yesterday.
They said there was a problem reported by Experian.
I open a free account with Experian and get my credit score: 999, 8 positives and 0 negatives.
I call the bank again. They tell me they got notice from Experian that there was an adverse occurrence (or something to that effect) on my name. They told me to ask Experian 'what are they reporting on'? They said this will give me the answer.

I called Experian. After giving all my details and verifying on the phone who I am, I got a message saying they don't want to talk to me because I am not a premium member.

I don't get it. What am I supposed to do?

I've sent them a complaint message.

Anything else I can do?

PS: in regards 'milking' and the banks being a business and needing to make money etc... yes, yes, all agreed. I get that. I just don't like the nature of their business and how they make money in our world. But that's a different topic I guess. 🙂

999 score is not seen by anyone so ignore it, 8 positives is good but do you have much credit history e.g. spending on the card every month, paying back in full, on the electoral register, contract mobile phone etc?

Barclays are talking out of their behinds, Experian report data given to them by Barclays and other lenders, Experian might record something else like a CCJ for example which Barclays spotted but it would be on your account if that was the case. Experian only provide support for their paying customers (don't pay them, it's a waste of money!) - ask for your statutory report periodically and check Clear Score and Credit Karma (both free) to see your other reports from Equifax and TransUnion