Barclaycard has slashed credit limits by thousands of pounds, leaving some customers with half the spending power they had before.
Credit card limits are tailored to individuals. Those with larger incomes and good repayment histories can usually borrow more; but limits can be cut if your circumstances change or you fall behind on repayments.
Yet Barclaycard is reducing how much customers can borrow even when they have never missed a payment.
Barclaycard is reducing how much customers can borrow even when they have never missed a payment
Matthew Gooch, 42, has had a Barclaycard for 24 years and could previously borrow up to £9,000. But last month the provider wrote to say it would be reducing his limit to £2,050.
The university worker’s income rose last year and he has spent less on his card than in previous years.
Barclaycard staff were unable to say why the company was cutting his limit; but after he telephoned to complain, his limit was reduced to £4,500 instead.
Matthew, from Norwich, says: ‘I feel completely let down.’
Several other Barclaycard customers have complained on social media about the cuts. One claimed their credit limit had been ‘decimated’ by more than 80 per cent, while another said their £8,000 limit had been reduced to £250.
The average UK credit limit fell by 49 per cent from January to December last year, according to data from the credit-checking firm ClearScore.
Justin Basini, the chief executive of ClearScore, says: ‘As support packages like payment holidays and the furlough scheme come to an end, some credit card providers have lowered credit limits even further as a way to protect themselves from people who may not be able to pay back money lent to them.’
In contrast, Santander and Virgin Money say they are not reducing any of their customers’ borrowing limits, to support those hit hard by Covid-19.
A Barclaycard spokesman declined to say how many customers have had their limits reduced, adding: ‘As a responsible lender, we continually monitor and adjust our cardholders’ credit limits to ensure they are not borrowing more than they can comfortably afford.’
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