TSB lowers credit limit with one day's notice

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Comments

  • bengal-stripe
    bengal-stripe Posts: 3,349 Forumite
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    SuzieSue wrote: »
    Why can't TSB give reasonable notice?

    Typical case for reducing the limit would the CC feels uneasy about the risk with a certain customer and thinks it would be prudent to reduce exposure to potential bad debt by reducing their limit.

    If the CC was to advise weeks beforehand of that pending reduction, the customer might just run-up their card to the old limit (or even above), thinking: 'Let them whistle for their money!'

    So the reduction of the limit wouldn't have had any benefit for the card.
  • lookstraightahead
    lookstraightahead Posts: 5,540 Forumite
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    Credit card companies are not there because they care. They are there to make as much profit as possible by offering a service people will use. That!!!8217;s why no one should rely on credit (I know only too well how this affected my life for years and years). This is no different to a butcher offering you sausages at one price one day, and a different price the next. In fact, they can stop selling sausages whenever they like and move their shop to a different location. Best not to rely on eating sausages ...
  • SuzieSue
    SuzieSue Posts: 4,096 Forumite
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    lookstraightahead wrote: »
    Credit card companies are not there because they care. They are there to make as much profit as possible by offering a service people will use. That!!!8217;s why no one should rely on credit (I know only too well how this affected my life for years and years). This is no different to a butcher offering you sausages at one price one day, and a different price the next. In fact, they can stop selling sausages whenever they like and move their shop to a different location. Best not to rely on eating sausages ...

    No, it isn't. There is no regulator for butchers as people don't need protecting from butchers.
  • nic_c
    nic_c Posts: 2,928 Forumite
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    So TSB have lowered the limit to above the current balance, so requirement to pay back more than you would normally, just a company limiting exposure.

    Giving too much notice would likely result in people trying to use up their credit to stop it being lowered. As to vulnerability, surely not reducing it quickly, would be more harmful since it would give people more time to use the credit up and so get into more debt? Why this a factor in this, for an account on 0% interest and being kept up to date (assuming no missed payments). I'm sure TSB have a set of guidelines on when to lower it unilaterally, often when it is seen that the debtor has opened up a lot of new credit.
  • SuzieSue
    SuzieSue Posts: 4,096 Forumite
    First Anniversary First Post Name Dropper I've been Money Tipped!
    bengal-stripe wrote: »
    Typical case for reducing the limit would the CC feels uneasy about the risk with a certain customer and thinks it would be prudent to reduce exposure to potential bad debt by reducing their limit.

    If the CC was to advise weeks beforehand of that pending reduction, the customer might just run-up their card to the old limit (or even above), thinking: 'Let them whistle for their money!'

    So the reduction of the limit wouldn't have had any benefit for the card.

    Exactly. It is for the lender's benefit. They decided to lend the money to make money so they need to take the risk.
  • nic_c
    nic_c Posts: 2,928 Forumite
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    SuzieSue wrote: »
    No, it isn't. There is no regulator for butchers as people don't need protecting from butchers.
    Trading Standards?
  • SuzieSue
    SuzieSue Posts: 4,096 Forumite
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    edited 7 March 2018 at 4:37PM
    nic_c wrote: »
    Trading Standards?

    Trading Standards does not tell butchers how much they can charge their customers. The financial regulators can set limits on what lenders can charge as they have done with pay day loans because vulnerable people need protecting.
  • lookstraightahead
    lookstraightahead Posts: 5,540 Forumite
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    But they!!!8217;re not breaking any of the terms and conditions.
  • [Deleted User]
    [Deleted User] Posts: 0 Newbie
    lookstraightahead wrote: »
    But they!!!8217;re not breaking any of the terms and conditions.

    Exactly - but people like a moan and usually hope to get a bit of compo out of it
  • Nebulous2
    Nebulous2 Posts: 5,105 Forumite
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    TSB are the only people to reduce my credit limit. I had a card on 27 months 0% then about a year later took two further money transfers of over £10k each. Around 3 months after that TSB cut my limit to just above my balance.

    I'm quite pragmatic about it. I'd had a good run, was only paying the minimum and they had given me interest free borrowing for over 2 years. As I wasn't using the card the chance of me exceeding the new limit between them sending the letter and me receiving it was small. Overall I was benefitting considerably more from the relationship than they were. My greatly increased borrowing put their money at risk and they took steps to protect it. It's now repaid, but they're still giving me 3% on £1500 of someone else's money.
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