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  • FIRST POST
    • SuzieSue
    • By SuzieSue 7th Mar 18, 10:30 AM
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    SuzieSue
    TSB lowers credit limit with one day's notice
    • #1
    • 7th Mar 18, 10:30 AM
    TSB lowers credit limit with one day's notice 7th Mar 18 at 10:30 AM
    How is this allowed? I received a letter today saying that my credit limit was being reduced tomorrow (8th March).

    The letter was dated 1 March, but either they delayed putting it in the post or there was a postal delay.

    But even without the delay, how is it acceptable to reduce someone's credit limit with 1 week's notice.

    it doesn't matter to me as I am stoozing and am on a 0% balance transfer deal with a balance below the new limit. But how do the regulators allow this for people who can't suddenly magic up money in a day?
Page 4
    • SuzieSue
    • By SuzieSue 7th Mar 18, 9:29 PM
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    SuzieSue
    If you!!!8217;re so against credit card companies why do you help finance them
    Originally posted by lookstraightahead
    How do I help finance them? I have used credit cards for over 30 years and have never paid a penny in interest but have stoozed thousands of pounds and have taken advantage of clubcard points etc.

    I have gained financially by using credit cards.
    • SuzieSue
    • By SuzieSue 7th Mar 18, 9:48 PM
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    SuzieSue
    The reason for the lack of notice is very simple and obvious.
    If they have reduced the credit limit then something has caused them to do it. Most probably adverse information on the credit report, adverse conduct of the account or an increase in debt levels to the point where they have concerns as to your ability to repay.

    If under such circumstances notice were to be given that the credit limit was to be reduced, what do you think individuals in such a situation would probably do?

    There is no legal requirement to give notice of such a reduction in credit limit and many good reasons not to.
    Originally posted by Ben8282
    Well, most people would stop spending to ensure that they do not go over their new limit.

    If someone is in severe financial straits then they are likely to be at the old limit, so giving them no notice won't make any difference. All it does is ensure that they pay penalties and lose any promotional rates as they can't find the money they need in a day.

    So they are more likely to default on their loan. How does that help anyone?
    • SuzieSue
    • By SuzieSue 7th Mar 18, 10:00 PM
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    SuzieSue
    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.
    Originally posted by Nebulous2
    That's all fine. I have no problem with any lender reducing my credit limit. My problem is them giving me only one day's notice which could cause unnecessary financial difficulties if I could not find the money immediately to pay off the excess balance.
    • lookstraightahead
    • By lookstraightahead 7th Mar 18, 10:02 PM
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    lookstraightahead
    If people are caught out going over their credit limits etc it helps finance the cc company, which in turn helps others to take advantage of promotional rates
    Last edited by lookstraightahead; 07-03-2018 at 10:06 PM.
    • SuzieSue
    • By SuzieSue 7th Mar 18, 10:13 PM
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    SuzieSue
    If people are caught out going over their credit limits etc it helps finance the cc company,
    Originally posted by lookstraightahead
    Which is exactly why lenders should not be alllowed to catch people out by giving them only a day's notice. It should be at least 14 days.

    I would prefer it if cc companies did not allow people like me to stooze as long as they lowered interest rates and penalties for people who genuinely needed credit. If they were forced not to catch people out then they wouldn't give people like me 0% deals which would be much fairer for everyone.

    Similarly, I think everyone should pay bank charges even if they are in credit so that people who need overdrafts don't have to pay extortionate rates.
    Last edited by SuzieSue; 07-03-2018 at 10:15 PM.
    • lookstraightahead
    • By lookstraightahead 7th Mar 18, 10:22 PM
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    lookstraightahead
    So you are happy to be more ethical if they are. You could always start first?

    Have you ever heard the story of the man who got bored of eating cheese sandwiches? He really did not like them, and every day he moaned to his colleague .. cheese sandwiches again!!!! His colleague said: look, mate, why not ask your wife to make you something different? To which he replied : I make my own!

    You are against a system that you are part of.
    Last edited by lookstraightahead; 07-03-2018 at 10:25 PM.
    • SuzieSue
    • By SuzieSue 7th Mar 18, 10:36 PM
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    SuzieSue
    So you are happy to be more ethical if they are. You could always start first?
    Originally posted by lookstraightahead
    Yes, I could but would you really turn down free money (and a lot of it)? I do give more money to charity than I would otherwise because of the free money I get so someone else does benefit.

    If I stopped stoozing, cc companies would still behave unethically. They need to be forced to behave ethically and then they won't offer me free money.

    I could voluntarily pay bank charges but unless everyone else did too, banks would not reduce their overdraft charges.
    • lookstraightahead
    • By lookstraightahead 7th Mar 18, 10:41 PM
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    lookstraightahead
    I am giving up now and going to watch some more comedy.
    • SuzieSue
    • By SuzieSue 7th Mar 18, 10:43 PM
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    SuzieSue
    I am giving up now and going to watch some more comedy.
    Originally posted by lookstraightahead
    So I take it that you would turn down free money if someone gave it to you?
    • John-K
    • By John-K 7th Mar 18, 10:50 PM
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    John-K
    I wish. I am at least 20 years older. But I care about Millennials, a lot of whom are struggling financially compared to me simply because they were born at the wrong time.
    Originally posted by SuzieSue
    No, they are struggling on the whole because of bad choices. To be struggling in modern Britain if you are able bodied and mentally well requires a real effort.
    • John-K
    • By John-K 7th Mar 18, 10:52 PM
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    John-K
    They allow me to take advantage of the promotional rates in the hope that I will make a mistake and pay them interest or penalties. They aren't doing it out of the kindness of their hearts.
    Originally posted by SuzieSue
    You are paranoid. They do it in the hope that you stay with them after the promotional rate ends.

    You genuinely seem to not understand the terms that you signed, or you just want an argument. In either case, aiím out. Your complaint is ridiculous, you come across as entitled and whiney.
    • chattychappy
    • By chattychappy 7th Mar 18, 11:46 PM
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    chattychappy
    It's pretty simple.

    Lenders express a willingness to lend money via the credit limit. They are free to reduce this if they want to. Why should they be "forced" to lend you money if you demand it? Why does "being vulnerable" make any difference? You agree to a variable credit limit when you take out the product.

    Existing borrowings are a different matter. They can't just call in what they've advanced you. I accept that in reducing a limit, transactions might "cross in the post" - but they deal with these fairly - you shouldn't be getting overlimit charges/reports because of this.

    Obviously if they gave more notice people would take advantage.

    As for the regulator "not doing it's job", I think things are fair for both sides. It couldn't operate any other way.
    • HornetSaver
    • By HornetSaver 8th Mar 18, 12:18 AM
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    HornetSaver
    It's pretty simple.

    Lenders express a willingness to lend money via the credit limit. They are free to reduce this if they want to.

    [...]

    I accept that in reducing a limit, transactions might "cross in the post" - but they deal with these fairly - you shouldn't be getting overlimit charges/reports because of this.

    Obviously if they gave more notice people would take advantage.
    Originally posted by chattychappy
    (snipped bits not of relevance or not in dispute).

    For me, they shouldn't have to give a moment's notice to say "we're not lending any more". However there should be a grace period between when that decision will have been taken, and when communication on that decision will have been received and acted upon. The protections on both sides should be stronger than relying on the other party to behave reasonably, given that all things not specifically defined as unlawful can be considered reasonable until proven otherwise in court.

    Let's say my 0% CC limit were £2000, and my balance has steadily climbed in recent months to its current total of £1,195. Perfectly reasonable for the CC company to decide "your new limit is £1,200", but equally reasonable for me not to be psychic and spend £100 on the card later that same day before the lender has had an opportunity to ensure I'm aware and/or implement a technical solution to prevent me from going over the new limit.

    The protections for both a lender and a borrower in such a scenario should be stronger - the borrower should have five weeks (the amount of time it takes to be certain that they've received at least one set of pay, allowing for bank holidays, different pay cycles etc) to ensure that they are below the new limit so as to avoid being treated as someone in arrears or having gone over their limit for fee and credit reporting purposes. The lender should have the right to prevent transactions from taking place after the decision is made but before it can be 100% certain that the borrower is aware of the new situation, however during this very brief window the borrower should not incur the usual fees and charges which would be applicable in any other situation of going over the limit.
    I'm standing by my pre-referendum prediction: "Brexit will lead to a recession"

    forums.moneysavingexpert.com/showthread.php?p=70662330
    • phil2580
    • By phil2580 8th Mar 18, 6:23 AM
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    phil2580
    All this arguing about notice periods is pointless...the Credit Card companies aren't doing anything wrong. It's their money that is at risk (kind of, but that's how modern banking works), if they choose to reduce how much they're willing to risk, that's their choice.

    The OP seems to believe that a CC company can reduce your limit below the current balance...they Consumer Credit Act prevents this. They will also, under normal circumstances, decrease to around 10% over and above the outstanding (plus pending) balance, so the OPs scenario becomes almost impossible, and on the extremely rare occasion it happens, a quick call to the CC company will sort it out.
    • Nebulous2
    • By Nebulous2 8th Mar 18, 7:23 AM
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    Nebulous2
    That's all fine. I have no problem with any lender reducing my credit limit. My problem is them giving me only one day's notice which could cause unnecessary financial difficulties if I could not find the money immediately to pay off the excess balance.
    Originally posted by SuzieSue
    That's all hypothetical though, because there wasn't an excess balance. There certainly wasn't for me, and as I understand it there wasn't for you either.

    So you are into the realm of supposition here. If there was an excess balance then I'd contact them to see what they would work out. You might find they were perfectly reasonable to deal with.

    I'm still not getting why you are so wound up about something that didn't happen, from a company which has freely given you a product that works to your advantage.

    Financial providers want to manage risk. Decisions I take in my life increase the risk to them. I took around £30k to stooze in a very short time. I assumed that would have consequences. I wasn't hugely surprised when they reduced my limit. It isn't personal.
    • SuzieSue
    • By SuzieSue 8th Mar 18, 9:11 AM
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    SuzieSue
    You are paranoid. They do it in the hope that you stay with them after the promotional rate ends.

    You genuinely seem to not understand the terms that you signed, or you just want an argument. In either case, ai!!!8217;m out. Your complaint is ridiculous, you come across as entitled and whiney.
    Originally posted by John-K
    That is exactly what I said. How is that paranoid? They are giving me free money in the hope that I will make a mistake and have to stay with them and pay their high rates.

    I'm glad you are out as you come across as totally ignorant especially after your comment about Millenials.
    • Heng Leng
    • By Heng Leng 8th Mar 18, 12:35 PM
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    Heng Leng
    SuzieSue - you argument would have weight if they were demanding immediate repayment of existing spending.

    They are simply declining to offer further borrowing - they can actually refuse to authorise any (new) transaction without lowering the credit limit.

    Overdrafts are worse - they are repayable on demand.
    • SuzieSue
    • By SuzieSue 8th Mar 18, 12:41 PM
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    SuzieSue
    SuzieSue - you argument would have weight if they were demanding immediate repayment of existing spending.

    They are simply declining to offer further borrowing - they can actually refuse to authorise any (new) transaction without lowering the credit limit.

    Overdrafts are worse - they are repayable on demand.
    Originally posted by Heng Leng
    But they did demand immediate repayment.

    The letter said:

    If the current spend on your cc is more than your new reduced limit you'll need to pay back the difference before 8 March 2018. And if your balance were to stay over the new limit after 8 March 2018 you will be charged and over limit fee of £12. Any promotional interest rates that applied to your balance will also be lost.

    The person in post #5 was over their new limit and had to repay immediately.
    • nic_c
    • By nic_c 8th Mar 18, 2:28 PM
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    nic_c
    But they did demand immediate repayment.

    The letter said:

    If the current spend on your cc is more than your new reduced limit you'll need to pay back the difference before 8 March 2018. And if your balance were to stay over the new limit after 8 March 2018 you will be charged and over limit fee of £12. Any promotional interest rates that applied to your balance will also be lost.

    The person in post #5 was over their new limit and had to repay immediately.
    Originally posted by SuzieSue
    I had missed this before. You would have thought there would be a grace period to repay if over the new limit. However it is in their T&C that they can. Was the new limit more than 10% above existing balance, as some have stated it supposed to be. Reliance on CC for debt isn't great as they can reduce the limit, which is often why loans are promoted in those instances.
    • SuzieSue
    • By SuzieSue 8th Mar 18, 2:36 PM
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    SuzieSue
    I had missed this before. You would have thought there would be a grace period to repay if over the new limit. However it is in their T&C that they can. Was the new limit more than 10% above existing balance, as some have stated it supposed to be. Reliance on CC for debt isn't great as they can reduce the limit, which is often why loans are promoted in those instances.
    Originally posted by nic_c
    Yes, that is what surprised me. How can it be reasonable to lower someone's limit with 1 day's notice and expect them to pay any excess back immediately?

    The new limit was about 4% over my current balance. I'm not going to dispute that as it doesn't have a negative effect on me.
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