Our cookies help to your experience with us seamless.
Manage your setting for our different cookies below.
Essential cookies are necessary for our website to work properly. Without them you wouldn't be able to seamlessly move around our website and make use of all our features, like your online account and webchat.
Our non-essential cookies help tailor our website to your interests and tell us how you use our online services. These also include remarketing cookies which allow us to show you relevant services and offers. This information is all anonymous.
Many of Barclaycard’s customers have been hit with a huge credit limit reduction this April, with calls for the cuts to be overturned.
Barclaycard customers have resorted to online forums and social media to share the difficulties that the credit limit reduction will cause; some reporting cuts of 90 – 95%, one with a reduction from £5,000 to £250 with a months’ notice.
With many personal accounts voiced online, it’s clear to see that many customers are unhappy with the new changes brought in.
Barclaycard said that the economic impact of coronavirus had caused them to review the credit limits and make the decision to reduce them, however, they haven’t said how many of their customers have been affected. This falls in accordance with the responsible lending they must be seen to offer by the Financial Conduct Authority.
Potentially. Your credit utilisation rate plays a part in your credit score. This is basically the amount of your credit limit you’re using, as a percentage. Most money advisors recommend you keep this below 25%.
Let’s say you have a credit limit of £3,000 and owe £250, your credit utilisation is 8.33%. If your credit limit is cut to £500 and you still owe £250, your credit utilisation will be 50%, which is where the impact to your credit file comes from.
There are reports online that Barclaycard have reduced credit limits below some of their customers outstanding balances, but they’ve defended themselves by saying that this isn’t the case. They’re suggesting that where credit limits are reduced, it will still be higher than the outstanding balance, with headroom for essential spending.
The reports online of this happening seem to have come from Barclaycard calculating the maximum credit limit, but clients have then spent, taking the balance higher than the credit limit was set to. Barclaycard have confirmed that this will be reassessed before the reduction takes place.
If you feel Barclaycard reducing your credit limit is unjust, you may have noticed from their letter that they’re offering the option to challenge them about the reduction. You’ll need to send some evidence, such as proof of your income, bank statements etc.
If the latest changes from Barclaycard have caused you to re-evaluate your financial situation or made you realise that you need some help and advice with your debts, you can speak to our experienced advisors in complete confidence on 01925 599400 or use our Online Debt Advice Tool without needing to speak to anyone.
Angel Advance provides online debt advice to get you back on track and make your finances more manageable.Get Debt Advice Now