To be pissed that Barclaycard decreased my credit limit?

[BusyGreyCat]

Got a notification today that Barclaycard has decided to lower my credit limit, and honestly, I’m pretty annoyed. I haven’t missed any payments, and my credit score is fine, so this feels like it came out of nowhere.

AIBU to think it’s unreasonable for credit companies to make changes like this without any warning? Has anyone else had this happen recently? I get that they’re trying to manage risk or whatever, but it feels like a punishment when I’ve done nothing wrong.

What would you do in this situation? Any tips on getting the limit restored, or should I consider moving to a different provider?

The only time that happened to me was when I rarely used the card. If you pay it off in full before interest hits, there's not really much in it for them though.

I'd ring them and ask.

I had this with mine too. I only used it a couple of times a year, always paid it off in full at the next bill date. They simply thought I didn’t need it - and they had a point really. I called them and said I’d like to keep it, so they put it back up again. It really wasn’t a big deal.

Banks have to hold capital aside for credit (including credit cards), so if it’s not being used, they’d like to reallocate that capital elsewhere, but I’m 99% certain it won’t be an issue if you ask them to revert to the old limit if there have been no issues.

What principle is that exactly? Credit card companies can’t win. They are criticised for increasing limits and here is your account, that you don’t borrow near the limit, so they have reduced it and that’s wrong too apparently when in actuality it’s responsible on their part. If you were using the credit available then I would get your grievance but you don’t use it. You still have a cushion as your other card has increased the credit limit so I don’t understand why you’re bothered.

Who dont you have a conversation with them? Surely that's the best way forward.

NatWest also did this to me a few years ago. Had the card nearly 30 years. Always paid off the balance but never got near the limit. I think one of the reasons is to reduce fraud exposure and also possibly to do with the Bank's balance sheet exposure. Credit limits are a commitment to lend by them so I assume this impacts on the money set aside for financial protection schemes.

I find Barclaycard very strict compared to other credit card companies. I’ve been a Barclays customer since high school (30 years ago) & am now a premier customer. Due to household income my salary can all be classed as disposable income, but they would only give me 16% of my annual income as a credit limit. I recently re-tried to increase it but they still said no. Instead I now use Amex as my main card clocking up lots of Avios airmiles instead. Their loss!

I just had a letter to say they were putting mine up. No idea why I only use it abroad.

If you pay it off in full every month then they make minimal money from you and probably aren’t bothered about retaining you as a customer.

Just message them and ask for it to be put back to what it was, if you always pay your bill on time then they won't mind.

My credit card (Natwest) have been doing this for at least 20 years... I get near to the limit or make a very large purchase and they put it up, I don't go near the limit and pay it off monthly, and they reduce it. It's not a punishment, and given that my limit is about 5 times more than I ever put on there in a month (and I pay it off monthly) I really don't care about it. If you do care, just speak to them.

what does it matter if you are no where near the limit and always pay it off?

I am in the same position and the reason I would need to keep it is for emergencies. I like to have a big safety net to cope with unexpected.i don’t keep any money in my current account so if i was ever stranded i would us the ccard.

I just wonder what you would use for instant emergencies money.

but they haven't taken it away totally... the OP says they don't use it and when they do they pay it off... so they are not taking away their card they are just reducing the limit.

i also have an 'emergency' credit card.. it has a zero balance.. i never use it, it just sits in my purse.. i've never had the limit decreaded in all the years i've had it! infact ethey keep putting it up?

TSB did this to me a few years ago.

They were helping me apparently.

I take it you've checked your credit score OP? If not, it may be worth doing, in case there's anything dodgy going on in the background that you're not aware of.

happened to me with a different bank after going part time and then again when I was on my second mat leave. no warning, just a letter.

I've had it done to me because I never went near the credit limit and paid off every month. I think it might also be partly for your security/their liability if the card is lost or stolen. If you're not using it up to the limit, they reduce it so that a thief can't run up as big a bill.

When mine was reduced I called them as I wanted to use the card for security on a big purchase which was at the old credit limit. They just popped it back up again for a bit.

It happened to me once; my credit limit was decreased by 50%. I rang and said, I'd prefer tp keep it at the previous level because it was always only insurance against something dreadful happening on holiday. They reinstated the previous ceiling.

That may well be why. Barclays are now uncomfortable with the level of credit extended to you; so they’ve reduced your limit in response.

The letter is correct, it is about a change to your credit file, just not one you’d perceive as negative.

They do review the credit limits from time to time. My Barclaycard went up last month to £13000. I've never owed more than £3k on it so why they think I need more is anybody's guess.

@BusyGreyCat Phone them up. Tell them to reinstate your original credit limit.

They do this because you aren't using the credit they have given you so they need to appear to be offering responsible lending. However the total available credit you have and your utilisation of it, impacts your credit score. Tell them to fix it.

Keeping your utilisation low helps improve your score. Say you had £1600 in credit card debt across 4 cards of £2.5k limit each, you pay it off monthly but your utilisation is 16%. Great.
They all drop their limit to £1k because you never spend more than £400 on each, your utilisation is now 40% - not great.

Marbles do it to me every couple of years, they always reinstate in and then increase it a few months later. They do have a business reason for doing it but most people just accept the decrease.

Tbh maybe you should keep some money in your current account for emergencies?

Why would you rely on borrowed money via a credit card for emergencies, when you have your own money, presumably in savings, that you could be drawing on?

If you never pay any interest then the bank are extending credit to you with no benefit at all for the bank, they don't just do it out of the goodness of their hearts 😂
They'd rather lend the money to someone who sometimes pays some interest in return.

my other credit card actually gave me an increase over twice its limit just about three weeks ago. if another provider has upped the credit available to you, maybe they feel the total credit you have is beyond a sensible limit.

They will look at activity on the card and say your limit is £15,000 but you only ever use the card up to £8,000 they will reduce it. - standard practice for card companies to manage their book. It costs them to hold limits which aren’t being used ( funding costs )

Happened to my colleague who wasn’t using his very much.

I think you can go online and adjust your credit limit upwards again. (I was able to do that in just a few clicks)