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This is a credit card I've had for over thirty years.

I don't think I've ever had a four figure balance on it and have never paid any interest so all they've made from me is the few percent from the retailer but they've seemed happy with that.

I started on £1k and through the 90s they were repeatedly and unilaterally increasing it by about a thousand a year until it hit £10k.

It was reduced a couple of times this decade and has now gone down to £3k.

It's an irrelevance for me as all that it means is that the amount I don't ever use has reduced from £9k to £2k; but if you're a sole trader or small business person needing every ounce of temporary credit at the moment that could be the final straw.  The timing seems awful.

Has anyone else had this occur? 

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3 minutes ago, Frank Hovis said:

This is a credit card I've had for over thirty years.

I don't think I've ever had a four figure balance on it and have never paid any interest so all they've made from me is the few percent from the retailer but they've seemed happy with that.

I started on £1k and through the 90s they were repeatedly and unilaterally increasing it by about a thousand a year until it hit £10k.

It was reduced a couple of times this decade and has now gone down to £3k.

It's an irrelevance for me as all that it means is that the amount I don't ever use has reduced from £9k to £2k; but if you're a sole trader or small business person needing every ounce of temporary credit at the moment that could be the final straw.  The timing seems awful.

Has anyone else had this occur? 

Funnily I received a letter this week asking if I would like to have my credit limit raised. I chucked it in the bin. 

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1 minute ago, sarahbell said:

Will keep an eye out.

 

Lloyds bank took my free overdraft away after about 23 years of me not using it or the account very much.

 

It looks like they're worried then and don't want to find themselves an unsecured creditor when somebody goes bust.

The only time I would start running up my credit card or you would use that overdraft would be if we really needed it because the Pandemic reactions have slashed our income and left us on the point of bankruptcy; the banks know this and are closing off those escape routes.

I think they're anticipating a lot of bankruptcies.

4 minutes ago, One percent said:

Funnily I received a letter this week asking if I would like to have my credit limit raised. I chucked it in the bin. 

You must be posh.  They've never asked me but just done it; saying I can contact them if I object.

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11 minutes ago, Frank Hovis said:

This is a credit card I've had for over thirty years.

I don't think I've ever had a four figure balance on it and have never paid any interest so all they've made from me is the few percent from the retailer but they've seemed happy with that.

I started on £1k and through the 90s they were repeatedly and unilaterally increasing it by about a thousand a year until it hit £10k.

It was reduced a couple of times this decade and has now gone down to £3k.

It's an irrelevance for me as all that it means is that the amount I don't ever use has reduced from £9k to £2k; but if you're a sole trader or small business person needing every ounce of temporary credit at the moment that could be the final straw.  The timing seems awful.

Has anyone else had this occur? 

I had one halved from 10k to 5k in 2009, but I presumed that was because I also never used it for credit, just online purchases for the protection and travel et cetera. Statement paid off when it landed on the mat, which I imagined was why at the time.

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20 minutes ago, Frank Hovis said:

This is a credit card I've had for over thirty years.

I don't think I've ever had a four figure balance on it and have never paid any interest so all they've made from me is the few percent from the retailer but they've seemed happy with that.

I started on £1k and through the 90s they were repeatedly and unilaterally increasing it by about a thousand a year until it hit £10k.

It was reduced a couple of times this decade and has now gone down to £3k.

It's an irrelevance for me as all that it means is that the amount I don't ever use has reduced from £9k to £2k; but if you're a sole trader or small business person needing every ounce of temporary credit at the moment that could be the final straw.  The timing seems awful.

Has anyone else had this occur? 

You don't make them money! Cutting your limit probably allows them to increase it on those that will and maintain the same 'exposure'.

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Just now, ste said:

You don't make them money! Cutting your limit probably allows them to increase it on those that will and maintain the same 'exposure'.

Well I do make them money because of retailers' fees.

However that's it as I've never paid interest so what was the logic in taking me from my initial £1k up to £10k and now back to £3k?  And why now?

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1 hour ago, Frank Hovis said:

Well I do make them money because of retailers' fees.

However that's it as I've never paid interest so what was the logic in taking me from my initial £1k up to £10k and now back to £3k?  And why now?

Get you to splash out, but you didn't.

Quote

Around 19 million credit card holders have had their credit card limit increased automatically, and 24 per cent of these say have then seen their spending rise as a result

https://www.thisismoney.co.uk/money/cardsloans/article-3415836/Millions-credit-card-holders-credit-limit-upped-automatically.html

Cutting your limit by £7k will allow them to increase others limits or leave someone alone that has a £5k limit, uses £4k of it, rarely pays off more than the minimum balance with a 29% APR but at the same time managing their total overall exposure (cumulative customer's card limits)

Type of customer and card limit is a factor ie likely to be riskier, but they can manage this.

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2 hours ago, MrPin said:

It seems pointless to arbitrarily cut the credit limit, when you don't use it.

Not really.  Because if you suddenly start using it, it suggests that your finances might have just deteriorated notably (Ie under/unemployment).  Therefore it’s a adverse lending risk - weirdly someone who uses and maintains the limit regularly is a better bet.  I only keep large limits for such a emergency  situation.  Probably some  capital benefit as well for the lender to reduce exposure.

I just had the same thing happen - luckily this provider allowed the limit to be kept if you spent money on it, so I went to the supermarket and bought some beers.

Overall, banks clearly on risk alert for furlough roll off.

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2 hours ago, Frank Hovis said:

This is a credit card I've had for over thirty years.

I don't think I've ever had a four figure balance on it and have never paid any interest so all they've made from me is the few percent from the retailer but they've seemed happy with that.

I started on £1k and through the 90s they were repeatedly and unilaterally increasing it by about a thousand a year until it hit £10k.

It was reduced a couple of times this decade and has now gone down to £3k.

It's an irrelevance for me as all that it means is that the amount I don't ever use has reduced from £9k to £2k; but if you're a sole trader or small business person needing every ounce of temporary credit at the moment that could be the final straw.  The timing seems awful.

Has anyone else had this occur? 

It's happened to me a few times on various cards

They monitor your spend and reduce your limit if you never use the full limit - it's an anti fraud measure I believe i.e. without any detriment to you they make the amount a fraudster can spend potentially smaller.

If you want the prvvious limit reinstated a simple phone call will reinstate it.

Edited by Hopeful
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I got a credit card around 2000 for buying online. I asked for £500 limit but they gave me £1000 then kept raising it until it was £8500. 

A few years ago it was reduced by a few thousand and very recently it was reduced to £3500.

I sometimes have an outstanding balance of a few hundred pounds and once almost 1k but paid off quickly by at least £100 per month.

It doesn’t matter to me if they drop it to 1k because I’m unlikely to even put that amount on. I only use it for buying stuff online for myself or the household.

 

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I think I have about £26k in credit at last check across 4 cards and get targeted quite a bit for more. I've often juggled around with interest free cards and had up to £20+k on plastic at some points or other when I've been spending money on doing up houses etc. Tactic is to quickly max a card out then set a monthly repayment that clears it before the interest free period ends. Then use the money I have "in hand" to be earning a return or just available for opportunities like a good stock becoming cheap...all the while I slowly chip away at the debts. I've always been in a cash position where I could pay my debts off tomorrow if needed.

Edited by SillyBilly
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I suppose there's a cost to providing an unused credit line -- you have to be able to cover it if it does get used.

So it probably makes sense to reduce it. Particularly if the credit provider sees a less certain future (more might use their credit lines, while providing the credit might become more difficult and default risks might rise).

 

Edited by Lightly Toasted
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