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  • FIRST POST
    • Colin6644
    • By Colin6644 13th Jun 18, 8:40 AM
    • 5Posts
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    Colin6644
    Credit Limits - or not..?
    • #1
    • 13th Jun 18, 8:40 AM
    Credit Limits - or not..? 13th Jun 18 at 8:40 AM
    If my credit card limit is exceeded in a shop purchase, my card is firmly 'Declined'. Quite right too.
    However, I recently made an online purchase by mistake that was approved even though it exceeded my limit by several hundred pounds. This caused all sorts of problems. Lloyds told me that it is up to the merchant to decide whether to take the money from the account, and it it does not need their approval. Any thoughts on this anomaly? Thanks!
Page 1
    • zx81
    • By zx81 13th Jun 18, 8:45 AM
    • 18,672 Posts
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    zx81
    • #2
    • 13th Jun 18, 8:45 AM
    • #2
    • 13th Jun 18, 8:45 AM
    It depends on the overlimit rules of the card issuer, as well as online/offline transactions. Nothing to do with the merchant.

    It's possible to go overlimit on any card.
    • shortcrust
    • By shortcrust 13th Jun 18, 8:48 AM
    • 2,109 Posts
    • 3,225 Thanks
    shortcrust
    • #3
    • 13th Jun 18, 8:48 AM
    • #3
    • 13th Jun 18, 8:48 AM
    If my credit card limit is exceeded in a shop purchase, my card is firmly 'Declined'. Quite right too.
    However, I recently made an online purchase by mistake that was approved even though it exceeded my limit by several hundred pounds. This caused all sorts of problems. Lloyds told me that it is up to the merchant to decide whether to take the money from the account, and it it does not need their approval. Any thoughts on this anomaly? Thanks!
    Originally posted by Colin6644
    The bit in bold is obviously not true. It's ultimately up to the bank, although they may not require authorisations for all transactions.

    Banks and card providers will often let you exceed your credit limit or overdraft limit, whether paying online or over the internet. I've been glad of it a couple of times in emergencies.
    • Colin6644
    • By Colin6644 13th Jun 18, 1:56 PM
    • 5 Posts
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    Colin6644
    • #4
    • 13th Jun 18, 1:56 PM
    • #4
    • 13th Jun 18, 1:56 PM
    Thanks for responding. What you are saying is the opposite of my experience. Do you have any evidence of the rules on this topic? Are there any?
    • Colin6644
    • By Colin6644 13th Jun 18, 1:58 PM
    • 5 Posts
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    Colin6644
    • #5
    • 13th Jun 18, 1:58 PM
    • #5
    • 13th Jun 18, 1:58 PM
    Thanks for responding. How can it be 'obviously not true' when this is what I experienced? You seem very confident. Where are the rules on this?
    • zx81
    • By zx81 13th Jun 18, 1:58 PM
    • 18,672 Posts
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    zx81
    • #6
    • 13th Jun 18, 1:58 PM
    • #6
    • 13th Jun 18, 1:58 PM
    Plenty of evidence from people who complain they were allowed to go overlimit.

    None of the lenders I'm aware of have a hard stop at the credit limit. No one wants to be blamed for leaving someone stranded at a petrol station at 2 in the morning.

    And of course offline payments are self explanatory.
    • zx81
    • By zx81 13th Jun 18, 2:01 PM
    • 18,672 Posts
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    zx81
    • #7
    • 13th Jun 18, 2:01 PM
    • #7
    • 13th Jun 18, 2:01 PM
    Thanks for responding. How can it be 'obviously not true' when this is what I experienced? You seem very confident. Where are the rules on this?
    Originally posted by Colin6644
    It's obviously not true because the merchant doesn't make that decision.

    That's not what you experienced - that's what you were told you experienced.
    • Colin6644
    • By Colin6644 13th Jun 18, 2:23 PM
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    Colin6644
    • #8
    • 13th Jun 18, 2:23 PM
    • #8
    • 13th Jun 18, 2:23 PM
    It's obviously not true because the merchant doesn't make that decision.

    That's not what you experienced - that's what you were told you experienced.
    Originally posted by zx81
    Are you trying to be helpful? It's not working.
    • BoGoF
    • By BoGoF 13th Jun 18, 2:25 PM
    • 3,490 Posts
    • 2,813 Thanks
    BoGoF
    • #9
    • 13th Jun 18, 2:25 PM
    • #9
    • 13th Jun 18, 2:25 PM
    Not helpful as in not what you want to hear?
    • Colin6644
    • By Colin6644 13th Jun 18, 2:29 PM
    • 5 Posts
    • 0 Thanks
    Colin6644
    Plenty of evidence from people who complain they were allowed to go overlimit.

    None of the lenders I'm aware of have a hard stop at the credit limit. No one wants to be blamed for leaving someone stranded at a petrol station at 2 in the morning.

    And of course offline payments are self explanatory.
    Originally posted by zx81
    Wrong. I have been declined for a few pounds potentially overlimit in a supermarket.

    What do you mean: 'offline payments are self-explanatory'? Not helpful.
    • zx81
    • By zx81 13th Jun 18, 2:32 PM
    • 18,672 Posts
    • 19,936 Thanks
    zx81
    What do you mean: 'offline payments are self-explanatory'? Not helpful.
    Originally posted by Colin6644
    It's helpful. But you're going to put in a little effort into understanding. I can't do all the work here.

    If the payments are offline, it can't be checked against the credit limit. Therefore it will be approved.
    • Ben8282
    • By Ben8282 14th Jun 18, 4:49 AM
    • 2,409 Posts
    • 1,107 Thanks
    Ben8282
    What do you mean when you say that you recently made an online purchase 'by mistake'.
    Do you mean that the purchase was a mistake or that you used the Lloyds credit card by mistake?
    What you were told by Lloyds is obviously not true in the sense that you have implied. While of course it is up to the merchant if they take the money or not in the sense that if the merchant was for some reason to decide not to bother to submit the transaction and take their money they are under no obligation to do so, it is not relevant here.
    I am surprised to an extent that they allowed the credit limit to be exceeded by 'several hundred pounds' although if you are a good customer with a high credit limit they may have permitted this.

    If the payments are offline, it can't be checked against the credit limit. Therefore it will be approved.
    Originally posted by zx81
    This is of course correct but we are talking about a transaction of 'several hundred pounds'. Such an amount would surely be well above the floor limit (or whatever floor limits are called these days) of the merchant and therefore Lloyds would have been under no obligation to honour it.

    What exactly is your problem?
    You have got your goods (or whatever you bought). If you don't want them as the purchase was a mistake you cannot use this as an excuse to try to avoid paying for them.
    Simply repay the over limit amount ASAP and after you have paid call Lloyds and very politely explain that you used their card by mistake putting it over the limit, you have repaid the money and would they please please waive the over limit charge and not mark your credit files adversely.
    You say that this has caused all sorts of problems. If you could elaborate on the exact nature of these problems, perhaps somebody could advise.
    Last edited by Ben8282; 14-06-2018 at 6:44 AM.
    • Thrugelmir
    • By Thrugelmir 16th Jun 18, 1:16 PM
    • 59,853 Posts
    • 53,223 Thanks
    Thrugelmir
    However, I recently made an online purchase by mistake that was approved even though it exceeded my limit by several hundred pounds. This caused all sorts of problems.
    Originally posted by Colin6644
    What problems?
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • glentoran99
    • By glentoran99 16th Jun 18, 1:29 PM
    • 5,476 Posts
    • 4,661 Thanks
    glentoran99
    How do you make a purchase by mistake?
    • Carrot007
    • By Carrot007 16th Jun 18, 1:47 PM
    • 1,600 Posts
    • 1,341 Thanks
    Carrot007
    What people are saying here is if you can;t be bothered to know how much is left on your credit card and rely on it being declined then you are going to have a bad time.


    Also it is really bad practice to go over 50% of your credit limit anyway.
    • faddy
    • By faddy 19th Jun 18, 11:24 PM
    • 484 Posts
    • 54 Thanks
    faddy
    Also it is really bad practice to go over 50% of your credit limit anyway.
    Originally posted by Carrot007
    Why? .
    • Ezorqs
    • By Ezorqs 7th Jul 18, 10:49 PM
    • 51 Posts
    • 18 Thanks
    Ezorqs
    It can lead to a lower credit rating as some lenders will consider you higher risk, this will mean less generous deals for you later or if you want additional cards (depending on personal circumstances and history).

    You should use the card regularly but if you get up to 75% they take a very dim view. Of course this depends on previous history and whether you have been meeting your minimum repayments every month. I.e. Stoozing. It is not for the faint of heart and can easily plunge someone into thousands of pounds worth of additional debt.

    So not best practice but allowable if you can keep it going.
    • tempus_fugit
    • By tempus_fugit 8th Jul 18, 10:53 PM
    • 493 Posts
    • 439 Thanks
    tempus_fugit


    Also it is really bad practice to go over 50% of your credit limit anyway.
    Originally posted by Carrot007
    Really? I've not come across this. I have a number of credit cards and one is currently over 50% as it has been since I took it out as it is a 0% BT card, and it will be until the 0% period runs out, and I have another that I use for general purchases that often goes over 50% of its limit but I pay it off in full every month, and I have had no problems. In what way is it "bad practice" to do this?
    Retired at age 56 after having "light bulb moment" due to reading MSE and its forums. Have been converted to the "budget to zero" concept and use YNAB for all monthly budgeting and long term goals.
    • sparkey1
    • By sparkey1 26th Jul 18, 4:24 PM
    • 439 Posts
    • 192 Thanks
    sparkey1
    Its bad practice if you want a healthy credit file. Generally its best to not utilise more than 30% of your available credit limits. Of course you can use more, and they are there to be used. But, you may find that things get a little bit tricky.

    By this I mean, other lenders may consider you to be over exposed. As card companies operate a risk based pricing model, and have acccess to other companies data via the CRAs, things tend to happen.

    For example, you might get letters informing you of a change in APR. You might get another lender lower your credit limits. That of course means that your credit utilisation average increases, and so it goes on.

    If you are still over your limit. Pay it down today, do not wait for the statement to be produced. Clear it, because when that hits the CRA, the events I have mentioned above may start.
    • sparkey1
    • By sparkey1 26th Jul 18, 4:32 PM
    • 439 Posts
    • 192 Thanks
    sparkey1
    tempus_fugit and Fady

    Like most you have probably made use of all the borrowing on a balance transfer and who wouldnt, which is why your individual cards may be over 50%. But its not single cards we are talking about here, unless you only have one card. We are talking about overall credit card utilisation, which you want to be no more than 30% to get the best APRs etc.

    Add up all your credit cards limits, add up all the debt, and then divide the debt by the card limits and multiply by 100.

    Example 20000 of limits across 4 credit cards. Owes 5000

    =(5000/20000) * 100 = 25% Utilisation Good credit risk, likely to have Lower APRs.

    Whilst on the subject, if you are on a promo rate, the CRAs know that and they are marked on your records. Which in itself is another identifyer of credit risk.
    Last edited by sparkey1; 26-07-2018 at 4:35 PM.
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