General Discussion about limit slashing on overdrafts and credit cards

Shakin_Steve

We had a £5K overdraft with Barclays for years and never once used any of it. Recently reduced to £2K, unless we wanted to keep it at 5, which we didn't. So nil overdraft usage will see it reduced as well as constantly staying in overdraft.

As an overdraft is meant to be a really short term debt, I can't see why any bank would offer more than, say, £1000. Anything above that, or for a longer period, should be offered as a loan. The application process would soon sort out whether it was affordable or not.

Hoenir

OrdinaryAllen said:

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.

Be a high level decision probably at board / risk management level. You haven't been singled out. Just one of a huge number of accounts that don't meet the ongoing criteria. 

TheBanker

OrdinaryAllen said:

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.

I'm afraid I think you're wasting your time with a complaint. At the end of the day, the bank doesn't have to lend money to anyone. You don't really have a valid complaint unless they've acted in a discrimatory way or if the sudden removal will cause immediate financial difficulties, or if they've made some kind of error e.g. removing the overdraft without telling you. 

You say there is no compromise - but you also say you believe Barclays want to reduce everyone's limit to zero but they have allowed you to keep an overdraft of £1.5k. That sounds like a compromise to me! 

OrdinaryAllen

Thank you for your responses. Barclays in their letter referred to my OD limit alteration and not anyone elses. My discussion with their advisors revealed, 1 not all personal banking cutomers have been contacted yet but they will be. 2. There will be regular reviews(every 3 -6 months) of your overdraft usage. So, if your overdraft usage reduces your limit will be reduced to that amount. Those were my findings through two conversations. If you are self employed for example your monthly earnings can fluctuate month to month, an OD (whilst expensive now) can help you bridge the leaner month and you can pay your OD off in the more prosperous month. Its more about having the discretion to use resources as when one needs them rather than your bank saying, 'like it or lump it, this is what we doing!

eskbanker

OrdinaryAllen said:

Barclays in their letter referred to my OD limit alteration and not anyone elses. My discussion with their advisors revealed, 1 not all personal banking cutomers have been contacted yet but they will be. 2. There will be regular reviews(every 3 -6 months) of your overdraft usage. So, if your overdraft usage reduces your limit will be reduced to that amount. Those were my findings through two conversations.

So there's nothing tangible to support an assertion that "this will be applied to all Barclays customers - high income or low income. The drive is to reduce everyones OD limit eventually to zero" then, just your recollection from lengthy but unsubstantiated verbal conversations?  Of course they'll try to reassure you that they're not picking on you specifically but that's some way short of a declaration of a radical new corporate policy....

Edit: their policy presumably remains much the same as it did a couple of years ago, which is simply common sense:

A spokesperson for Barclays said: "We review all personal arranged overdraft limits at least once a year, taking into account all the financial information we have about each customer.

"Where this suggests that a personal arranged overdraft limit may be too high, we’ll plan to reduce it to a lower limit, taking into account how much of the overdraft has been used over the past 12 months. If the overdraft hasn’t been used at all for a long time, we may remove it."

https://www.moneysavingexpert.com/news/2022/08/barclays-bank-overdraft/