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Original poster

Credit Card Help, Can anyone advise?

120 replies

CreditCardHelp · 18/09/2019 13:37

I paid my credit card off in full 2 days ago, and I've just had a text to say they have decreased my limit. I now 2grand vanished into thin air, which is my money to survive on for the next 3 months. I have always paid more than my monthly minimum payments and an advisor I spoke to 4 weeks ago said that my account was looking good and it was being managed really well. As I'm a student, I pay off my balance in full every 3 months when my loan comes through the live on that, always paying my minimum payments off.
My credit score hasn't changed, there is no reason why they would do this. I now have been left 100 pounds to last me 3 months. They have passed it into complaints and say it can take up to 8 weeks to get back to me. Can they do this? The guy on the phone said they may be able to compensate me if it's left me in financial hadrship, which it has. I'm really worried about this now, and worrying that I will have to drop out of uni. They have me no warning that they had any concerns with my account, they just did it today.
Has this happened to anyone and what happened when they reviewed it?

OP posts:
Original poster
CreditCardHelp · 18/09/2019 15:39

I can't believe they can just shag me like that. I can't get a student account, universal credit severely overpaid me so they give me fuck all. Uni hardship isnt open until November and they don't accept credit cards as a reason for being in hardship. So I'm basically fucked from every direction unless I can pursuade the credit card company to reinstate my limit. I really thought that paying off my balance and making extra payments was a good thing.

OP posts:
NurseButtercup · 18/09/2019 15:39

If you're living off your credit card then you should be eligible for funds via your university's hardship fund that you shouldn't have to pay back. Please contact the student services team for support on how to apply. Good luck

Hahaha88 · 18/09/2019 16:18

TBF they haven't done this to you, you've done this to you. Pressumably you built up a balance on your credit card and instead of saving your 1st student loan installment to pay it off you spent it. Otherwise you'd have the first installment in your bank for four months, whilst you used your credit card. Then you'd have got your second installment and used the first installment that had been sat in the bank for four months to pay the credit card and then repeated the process. So you'd always have one installment in the bank.
Surely everyone knows it's not viable to live on borrowed money??

Original poster
CreditCardHelp · 18/09/2019 16:26

I don't really get your post, my student loan doesn't go that far. My loan gets split in half, half goes on my credit card for spends, the other half sits in my account to cover bills for the house. There's no spare money left over to save.

OP posts:
dementedpixie · 18/09/2019 16:30

Why cant you get a student account?

IronicalCallSign · 18/09/2019 16:38

My loan gets split in half, half goes on my credit card for spends

Wait, what does this mean?
You mean you're already in debt to the 50% value of the loan installment when it's paid out, or you load up the card with a positive balance, or you use the card everyday then pay it off in 1 whack? (The third is what we do, but I've got a credit card that pays out points and a good credit score with my main bank being the issuer)

I'm very confused about how you're using credit cards... It sounds like you think they're like an overdraft, or worse, free money that's already "yours".

It's an odd (expensive) setup unless I'm misunderstanding??

filka · 18/09/2019 16:38

So you are living on about £2,000 every 3 months (1500 +2x (2-300) but you have a fairly certain source of income, the student loan. That seems to me more like overdraft territory than credit card. Then you just use your everyday debit card for spending.

Banks should be sympathetic and the interest rate should be lower. People are not good at switching banks so banks do try to hang onto student customers - I'm still with the bank I opened with at uni over 35 years ago.

But secondly, it seems like you start every quarter with zero and progressively spend your way to minus £2,000, then pay in your loan to get back to zero.

Is there any way that you could raise £2,000 (just one time) so that you started the quarter with plus £2,000 and spent your way down to zero balance, then topped your account back up to plus £2,000. That way you wouldn't be permanently borrowing anything, or needing to rely on a credit limit or overdraft limit being there. Options could be either working (difficult for you) or Bank of Mum & Dad (if available) or (hardest of all) reducing your budget.

DonnaDarko · 18/09/2019 16:43

My credit score has increased without paying my card off every month and my score was abysmal due to really bad decisions in the past. Making over the minimum is enough, you shouldn't pay it off if you're actually struggling to then not use it.

It will also say in their t&C's that they can reduce your limit at any time.

Hindsight is a wonderful thing though. I think you should see if you can get over student account and overdraft with your bank.

DonnaDarko · 18/09/2019 16:47

I just realized, they might have done this cos they're not earning interest off you, as you pay it in full every month. I've heard of companies doing this.

Original poster
CreditCardHelp · 18/09/2019 16:47

My credit score is too low for an overdraft or a student account. My bank advised me to take out a credit builder card which is what I have done, my credit score is going up. My account is well maintained, and I regularly pay the balance off. I've just spoken to an adivser and she can't see anything that would suggest why they would reduce my credit limit but there's nothing she can do until its been through all the relevant teams etc. So i basically just have to sit and wait. I spend on my credit card between loan installments, and off twice the monthly minimum payments each month. Then, when my next loan installment comes in, I clear the balance and start the process again. I know it's not ideal, but it's all that can work for me right me now, so when I've finished my degree my credit score should be good enough that my bank will accept me for the masters loan which is what I need.

OP posts:
dementedpixie · 18/09/2019 16:50

What bank are you with? Have you tried a different bank? A lot if students wouldn't have a good credit rating tbh

dementedpixie · 18/09/2019 16:50

Credit cards should be used for small purchases and then pay it off. As a student I wouldn't put large purchases on it

Original poster
CreditCardHelp · 18/09/2019 16:53

I use it for fuel and food and then any unexpected costs like school stuff, car repairs etc. So usually I spend about 500 a month on it unless my car needs a major repair done which it did last month which took me close to my credit limit, but I still paid more than the minimum payment on it to get me through to when my student loan came in.

OP posts:
WhyBirdStop · 18/09/2019 16:56

So for example as a student you stay in September, your first loan payment is in September, what did you do with that? You then spent on the credit card for three months and paid it off with the serving loan installment. As per PPs I'm confused unless something has drastically changed with student finance recently and you don't get your first installment until Christmas.

YobaOljazUwaque · 18/09/2019 16:56

I'm very sorry that you are in difficulty but tbh your statement that you need that credit in order to get through the next few months is only proof that the decision to reduce the limit was correct. Its a really bad idea to live on credit for day to day expenses.

Computerised algorithms increased your limit. Now a human has taken a closer look and they have realised they were giving you more credit than was reasonable given your income.

It's a horrible shock that this has happened but will be good in the long run - allowing credit to build up like that can trap you in unmanageable debt.

IAmALazyArse · 18/09/2019 16:57

Why do you need bank to provide lian for masters if you don't mind me asking?

IAmALazyArse · 18/09/2019 16:57

*loan

WhyBirdStop · 18/09/2019 16:58

When I got my student account and £1750, gradually increasing to £2500 interest free overdraft (thank you hsbc) , I had no credit rating because I'd never borrowed or financed anything, can you try other banks for student accounts?

Original poster
CreditCardHelp · 18/09/2019 16:58

I paid off my balance with half of my student loan. I didn't realise that paying off my credit balance was a stupid thing to do.

OP posts:
WhyBirdStop · 18/09/2019 17:00

How did this start though? Say you stay your first term in September, you start accruing student related costs in September, your loan is paid in September, what happened to your very first loan payment that you would've had before you incurred student costs.

IAmALazyArse · 18/09/2019 17:02

If your limit is now 2k you still have enough limit on it if you are putting about 1500 a quarter?

I agree with others, it's very risky to live off credit card.

If I understand it right, you run up the card debt over the summer, now paid it off with part of installment from SF so now you have to run up another debt which will be paid by next SF installment?
So you don't start with 0, but already in minus if I got it right.

You need to start making some changes so you are not permanently in minus essentially.

dementedpixie · 18/09/2019 17:03

All the credit build places say to make small purchases on the card and pay off in full. They also say not to use too much of the credit offered e.g. one site says :

Keep your credit utilisation low.

Your credit utilisation is the percentage you use of your credit limit. For example, if you have a limit of £2,000 and you’ve used £1,000 of that, your credit utilisation is 50%. Usually, a lower percentage will be seen positively by companies, and will increase your score as a result. If possible, try and keep your credit utilisation at 25%.

Uberbeeboo · 18/09/2019 17:06

Hi OP, Could the lowering of your limit be due to you being a full balance payer? I vaguely remember when I worked for a CC company moons ago, that there is no profit to be made from those who clear their balance each month, as daft as it sounds. So although your credit score will be improving, the bank doesn't make any money from you, yet it costs them money to service you as a customer. From a business point of view the best customers will be those who make the minimum payment and pay lots of interest. I'd maybe query what they have to offer as compensation and hopefully they'll offer you a suitable solution.

Original poster
CreditCardHelp · 18/09/2019 17:08

@WhyBirdStop I'm sorry you're not making any sense to me.

My credit limit this morning was 2k. They've now lowered it to 500, but taken off what I spend on it yesterday which has left me with 120 pounds.

OP posts:
Anxiouszalice · 18/09/2019 17:10

Hi OP,

If you look on 'Moneysavingexpert' and go to 'Credit club'- you can find out which credit cards you might be eligible for. A lot of cards will start with a small-ish limit but that would still be better than nothing.

Also do look into the University's Hardship Fund- I remember when I was at Uni some 18 year olds resorted to that after spending way too much on nights out- you deserve it so much more than they do!