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What to do if your credit card limit has been reduced

Written by: Emma Lunn
Barclaycard has slashed the credit limits of thousands of credit card customers, despite no apparent change in their finances or credit scores.

Barclaycard customers have been complaining on social media over the past week after receiving letters and messages informing them their credit limits have been reduced.

One Twitter user Tweeted: “@Barclaycard have reduced my limit by 98% from 16k to 250. Perfect credit history and had the card a decade which has been managed perfectly…being used and paid every month. Pointless having the card now as I can spend that in one transaction.”

Another Tweeted: Having had a @Barclaycard for several years that I paid off every month without fail, they have now contacted me to say they are lowering my credit limit from £1800 to £250. Why?”

In response to angry customers’ Tweets, the Barclaycard Twitter account (@barclaycard) claimed the cuts were “done for the right reasons as a responsible lender”.

A Barclaycard spokesperson said: “As with many other lenders, our credit risk models take into account changes in the UK economy, as these may impact our customers’ ability to manage their borrowing effectively.

“Over the past year, we have had to take into account the ongoing economic impact of coronavirus, and this has resulted in an increase in the number of customers receiving credit limit decreases. Having up-to-date credit risk models is part of our commitment to being a responsible lender, to help ensure that customers are not borrowing more than they can comfortably afford.

“For some customers, where we don’t believe that their current limit is affordable, we provide information on how to appeal the limit change by verifying their income. When we reduce a customer’s credit limit, we will not reduce it to below their current balance, and we will ensure that they at least have sufficient headroom on their account to continue essential spending.”

According to a Clearscore report, average credit limits at the end of last year were down by almost half (49%) of what they were at the start of 2020. Meanwhile credit scores have gone up from an average of 359 in March 2020 to 398 in March 2021 (according to the Equifax scale out of 700).

What to do if your credit limit has been reduced

Appeal directly to your bank

If you feel you can demonstrate that you’re financially stable and able to repay your outstanding credit card debt on time, you may be able to increase your credit limit by having a conversation with your credit card provider.

Find a better deal

If your credit card provider has significantly reduced your credit limit to a point that isn’t sustainable for you, now may be a good chance to switch to a different credit card company.

Check your credit report

Check your credit report regularly for any changes that you don’t recognise, such as changes to your credit limit or unknown credit applications. These can drastically impact your credit score but, once reported, can be rectified with your bank and the credit reference agency.

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