General Discussion about limit slashing on overdrafts and credit cards

wmb194

GeoffTF said:

I have read about credit limits being cut on here and I thought that I might be next for the chop. I got a letter from Barclaycard a couple of days ago. They have just increased mine.

Yes, same for me and by quite a lot.

Edit: Plus a new HSBC card.

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moneyaspie2024 said:

Hoenir said:

moneyaspie2024 said:

Hoenir said:

Some would say what cost of living crisis. 

Mabey people who shop at Waitrose or booths 😂

Personal money management alas is a skill that has been lost over recent generations. Want it now. Pay later. Springs to mind. 

You are most certainly correct, I’m 20k in debt and I and if I stick to the plan I’ll be debt free when I’m 34, which I am doing via snowballing ect. 

There's your problem: they're nervous about you. Have you been on here before with another user name? This all feels very familiar.

DullGreyGuy

moneyaspie2024 said:
It’s simply a form of financial exclusion dressed up as responsible lending via the back door. 

The blame can be much more reasonably levelled at sites like this that have championed getting out of your debts by claiming it was irresponsible lending which caused a surge in complaints to the FOS which highlights it to the FCA who have in turn started looking at these things which makes people tighten their processes and review prior decisions which may not have been too robust. 

My world is much more insurance than banking but we fall under the FCA too. A number of former direct insurers always would offer instalments to all customers unless they had defaulted on a previous repayment in the last 3 years. Their idea was that they could cap their losses by voiding the policy so it's not like a bank thats lost the full £10k they lent. With the FCA focus on responsible lending they've since started doing credit checks and now will only offer instalments to those with a good credit record. No doubt we will see press about spikes in uninsured drivers because those with bad credit records and no savings cannot afford to pay their insurance in full up front any more. 

Its someone "in the deep end" that are exactly the sort that the FCA will look at and ask a bank to justify how they think they can afford a £3k overdraft; its why we had the whole "persistent debt" drive with credit cards a couple of years ago that required banks to take positive action to stop people just repaying the minimum payment forever. 

On the basis the business alone have been happy with high limits and people just repaying the minimum etc it is odd to say its the business using cost of living as an excuse for the change rather than pointing to the FCA who's demanding these things. 

Nasqueron

I earn less than 30k, I have a good credit record with a fair amount of 0% debt stoozing, Barclays (to over £12k), Tesco and Halifax have all increased my limit in the last 12 months by £1000, I just got a new HSBC card with a £5k limit and had no issue.

You have 20k of debt that will take 4 years to clear if I read your posts right, your bank is removing a £2k potential extra debt in reducing your OD - an OD you state clearly you do not use more than £100 of occasionally.

It is nothing to do with your medical situation, it's everything to do with responsible lending. You want a safety net that you never use, they don't want to risk you running up unaffordable debt.

sheramber

Put some extra money into you current account until it has an extra £2000 in it and then you have  a  £2000 safety net. 

Let others who have their OD’s reduced sort their own problems out. You don’t need to worry about them, concentrate on your own position. 

You are sure the OD will be reinstated so you will be back to where you were. 

No longer any problem. 

OrdinaryAllen

Hi All,
Barclays bank have just sent me a letter saying they will reduce my OD from £5k to £1.5k. They have stated this is company policy and have justified this by reviewing the last 3 months of my overdraft usage which was conveniently less than £1.5k. Any other 3 month review period over the last 3 years would have shown a far greater overdraft usage. I explained i wanted to keep the £5k limit as a buffer, i am appealing this now but have been told by a Deepening Relationship Advisor at Barclays(you couldnt make that title up!) that i will most likely be unsuccessful.  I made a formal complaint which they were very eager to make me accept this had been resolved. I 100% confirmed i wanted complaint to stay live. After 3hours of conversations there has been no customer care, no problem solving, no compromise and no agreement from Barclays. Just Faux Empathy and a sense they are doing this in the best interests of their Underwriters not the customer. Beware as this will be applied to all Barclays customers - high income or low income. The drive is to reduce everyones OD limit eventually to zero.

eskbanker

OrdinaryAllen said:

Beware as this will be applied to all Barclays customers - high income or low income. The drive is to reduce everyones OD limit eventually to zero.

What evidence do you cite for this claim?

OrdinaryAllen

A letter from Barclays and 3 hours of telephone conversations with Barclays Advisors. I understand the same is happening at other high street banks but not all.

eskbanker

OrdinaryAllen said:

A letter from Barclays and 3 hours of telephone conversations with Barclays Advisors. I understand the same is happening at other high street banks but not all.

If you have a letter from Barclays confirming that they're planning to remove every customer's overdraft, then this would be news worth sharing, please post a photo or link.

Nasqueron

If you can provide evidence that you're continually in the OD, that merely reinforces the reasoning of Barclays to reduce their potential exposure to financial hardship complaints and to follow responsible lending. Overdraft is an expensive debt and keeping £5k as a buffer can be very costly if you can't clear it and are continually going into it. I'd suggest going to the Debt Free pages on here for advice.

Barclays upped my limit on my CC to about 45% of my salary, one of 3 limit increases I had this past 12 months, it is not a blanket policy, rather it's done based on individual situations.