Hi There...Just wondered if anyone else has been affected?
Had sky card for about 3 years now, use it every month for all my purchases, and then pay it off in full every month by DD. Spend between 400 - 500. Sometimes more if i have a expensive month.
Well we got a letter last week saying that they have lowered credit limit from 4500 to 430 from immediate effect. No reasons for such. I have 402 on it at the moment, so leaves me with 18 until 15th December when the DD comes out.
Rang them up tonight to ask reasons, was told cannot give reasons, just that we are many of thousands that credit limits have been reduced. And that he cannot increase it, not even slightly and that would be looked at around 4 months time...
So question is, any idea why??? Do you think its because we pay it off in full so thus they are not earning any money from us?
All i know is that im peeved as i use the sky card to collect the points to pay off my sky tv!!
I think someone posted the same skycard comment the other day, 7000 limit down to 200 or something, your not alone!
They're looking at your spending habits. Like you say you spend around 400-500 a month on average, they're setting a limit that they believe is appropriate based on your spending.
They're looking at your spending habits. Like you say you spend around 400-500 a month on average, they're setting a limit that they believe is appropriate based on your spending.
This has just happened to me, and the above is not correct. In my case, I had a balance of 300, so they set the credit limit at 320:mad: . My average spend is in fact around 600 to 750 a month (but pay it off in full by DD), so what they did was set the limit to just above what is actually on the card. When I spoke to them, they were positively rude to me. I asked them point blank why they were doing this and did they not value me as a customer, because effectively they have cancelled my credit card - they said it wasn't them, it was an automatic system, so they are actually saying that they leave lending decisions down to a computer or an outside body. I fully expect that when the next DD pays off the balance for this last statement, they will drop my credit limit again.
What particularly incenses me is that Skycard is actually Barclaycard, and it sounds as if Barclaycard are also turning on their customers (see the forum about Barclaycard trying to catch customers out by changing the due date without announcing it properly).
It's unfortunate that Martin's "It Pays To Watch" isn't on at the moment, because I'd like him to advertise the fact that Barclaycard and Skycard are turning on their best customers. Is it a coincidence that these card providers are doing this now, just before new legislation comes in about the way banks treat their customers?
Unfortunately, the only answer for me seems to be to tell them what they can do with their credit cards, make a complaint (which Skycard have already told me will be a waste of my time) and maybe forward all this on to the Ombudsman (if there is one for credit card providers).
maybe forward all this on to the Ombudsman (if there is one for credit card providers).
There is, its the FOS (Financial Ombudsman Service)
I have had the same. Mine dropped from 7500 to 1310. I had just over the new credit limit on my card when they did this. Because the letter took 3 days to reach me, we were unaware of this change and my wife used the card to pay for some concert tickets online. The transaction seemed to go through but was later rejected because we were over our credit limit, and as a result she has missed out on getting the tickets.
When I phoned Sky Card they refused to even slightly increase the limit and couldn't give a sensible explaination to why they had decreased it by such a huge amount. They said they would give me 2 months to pay the amount over my new limit!! Very kind of them!! Imagine if I had spent up to the original limit with them and had 2 months to pay it back! Happy Christmas to you Sky Card!!:mad:
I'd like him to advertise the fact that Barclaycard and Skycard are turning on their best customers.
Firstly, you are NOT in any way one "of thier best customers"; if you pay the balance off in full each month, and then, you gain points which count towards your bill, how can you be one of their best customers? They lose money on you for crying out loud. Unless you keep a balance on the account, they make no interest from you, yet it costs them everytime they send you a bill, new card, give you oints etc...
They are doing this because of the credit crunch. Barclays have been hit hard, fortunatly for them and the HSBC (moreso the HSBC because they have strong business in the East), they are big enough to absorb a lot of the hits, so they dont make the headlines day in day out, however they need to try and get themselves straight, and as a result, unprofitable consumers will be hit, as will customers who they believe pose a bigger risk than they would like, with reduced credit limits.
There is nothing you can do about it, it's in the terms and conditions that you agreed to, get over it, if you need a card that badly, go and get a new one.
I am sorry to hear of these situations, for everyone it happens to, but moaning about it won't do anything, unfortuantely, whilst you yourself sound sensible with money, there has been a decade of easy credit, and consumers have been very wreckless with it, which has part led to the problems we have in the world economy today. People need to realise that as stupid as the banks can be at times, they are no longer going to look after customers that a. are a risk and b. make them no money to make up for the massive losses.
:(
Firstly, you are NOT in any way one "of thier best customers"; if you pay the balance off in full each month, and then, you gain points which count towards your bill, how can you be one of their best customers? They lose money on you for crying out loud. Unless you keep a balance on the account, they make no interest from you, yet it costs them everytime they send you a bill, new card, give you oints etc...
They are doing this because of the credit crunch. Barclays have been hit hard, fortunatly for them and the HSBC (moreso the HSBC because they have strong business in the East), they are big enough to absorb a lot of the hits, so they dont make the headlines day in day out, however they need to try and get themselves straight, and as a result, unprofitable consumers will be hit, as will customers who they believe pose a bigger risk than they would like, with reduced credit limits.
There is nothing you can do about it, it's in the terms and conditions that you agreed to, get over it, if you need a card that badly, go and get a new one.
I am sorry to hear of these situations, for everyone it happens to, but moaning about it won't do anything, unfortuantely, whilst you yourself sound sensible with money, there has been a decade of easy credit, and consumers have been very wreckless with it, which has part led to the problems we have in the world economy today. People need to realise that as stupid as the banks can be at times, they are no longer going to look after customers that a. are a risk and b. make them no money to make up for the massive losses.
:(
I'm sorry, but as a CC customer who pays off my balance every month, how am I not making Barclaycard money?!
If I made my minimum payment of about 30 a month, they would get 3,600 out of me each year! Because I pay about 1,300 a month in full, they have 15,600 to invest and get interest, or whatever they do on the money markets!
If us balance payers are such bad news, what would happen if we all pulled out and let the CC's just depend on the minimum payers and defaulters?!! How much dosh would they have swilling around then?
All this talk of making money out of those paying interest I assume is a very long term view, and dependant on the customer settling the final bill! But who is bailing them out while they wait for these returns?!
Balance payers I would imagine.
I'm sorry, but as a CC customer who pays off my balance every month, how am I not making Barclaycard money?!
The only way card companies make money is from people who don't pay their balance off every month. That's why.
Hold on; they lent you the money in the first place, so they dont have x amount to invest.
Look at this way:
- Bank gives you a card with a 1000 limit.
- You spend x amount each month, therefore for a short while at least, the bank does not have that money.
- You pay off the balance in full each month, and therefore avoid paying interest on the balance.
- Bank get's its money back after x amount of days.
- Process begins again next month.
Bank make 0.00 in interest from you.
Please enlighten me where the bank are making money from you on that card?
It is costing them in the following:
- Sending out statements once a month to you.
- Issuing a card every 3 years or so, or when it expires.
- Everytime you call customer service (even if like me, it is rarely), it costs them to emply that person who answers your call.
- You get points which you can then go on to use to pay your Sky bill or get other perks.
- They protect you from fraudualent use; if this happens they bail you out, and again, this quite often costs them money, if not in cash, in the time spent and their employees who have to deal with it.
If you owned a business, which would you rather have using your service? The man who comes in and lends money off you each month, at no charge? Or the man who comes in and lends money off you, but pay's for the privaldge each month?
Someone who does not pay off the balance in full, does not always have to default you know. I never pay my balance off in full, because I see my credit card as a flexible loan. I pay 200 - 300 per month, whatever I can afford basically. I owe about 1400 on the card atm, and am aiming to get it down to zero by May 2009. However, the bank is making say 25 per month interest from me, and has probably made back on interest, what they have lent me, over the years, without even considering the fact they will have got the money back. For a while, I was paying 30 per month interest, because I never realised that making the minimum payment was so bad, until I sat down and thought about it a year ago.
So whilst, my balance may have been between 1700 and 2000 from say 2005 until 2007, I always met the minimum payments (never once have I defaulted since 2004, and that was just a day late payment), they have made a good 800 or so out of me in those two years alone (not including their first year, and this year), and are still making money from me in interest today. When I have paid it off in May, they will have all the money back, but they will have made as much as they originally lent, if not more, in interest.
Now whereas some cutomers are seeing their limits being reduced, guess what happened to mine a week ago (I posted it on here incidentially). Yes, it was increased out of the blue, by 1000. I am not likely to ever use it, cos I never want it to go over 1000 ever again, but for the bank to increase my credit, at the time of a credit squeeze, they must see me as a good customer, and I guess there are 3 reasons for this:
- I make them money.
- I am reliable with payments, never missing any.
- I can clearly afford the minimum payments even if I maxed the balance.
So I think I am correct in what I say. Okay, there will be other factors involved, but you cannot be making them money, if they are loaning you money, and you are never paying a penny interest.
Sorry!
The only way card companies make money is from people who don't pay their balance off every month. That's why.
I am not trying to get at you or be difficult, but am I completely off in thinking that the money which the likes of Barclaycard glean, is not invested in stocks, shares, sold or whatever financial institutions do to get further value from what they hold in their coffers in the banking world?
Or are you stating that they do nothing with the money apart from glean interest from those who don't pay in full every month, and this is their only source of revenue?
I find this hard to believe of financial institutions, but if the facts prove that the likes of Barclaycard make no money by giving credit, apart from fees and interest on those who don't pay in full in each month, I will accept that I am a loss leader in paying 12,000 more to them each year then I need to.
I'm stating what the direct source of revenue is for any credit card company. Nothing about stocks, shares or any other financial aspect. Just purely credit cards.
Ho do you come to the figure of "paying 12,000 per year more than you need to" may I ask? If you are paying no interest, then you are only paying what you are taking out, so it is not more than you need to.
If, on the other hand, you are paying 12,000 per year interest, you have as much as anyone to have a good credit limit.
If you are suggesting you have 12,000 worth of shares in Barclays, then I am afraid they don't look at this when they make the decisions im afraid.
BTW, I think I see where you are coming from, and understand what you mean, but if so (it's the first choice from above I am thinking to be true), then I am afraid you do ultimately lose them money, and don't make them a penny.
If for nothing else, you are taking x amount out each month, of the money they have for investing, lending etc, and then not having to pay any fee for doing so.
It's a no-win situation for them, they are constantly x amount in debt to their finances as a result of you loaning money each month, and never making a penny out of it. The next month, they have to do the same thing and again, the month after that etc...
So really, the only person who is benefitting from the deal, is yourself.
:)
Geenie,
At no point do Barclaycard get any significant amounts to invest. The money you give them goes to pay the retailers you buy your stuff from!
Day 1 - You buy your groceries in Tesco for 100
Day 3 - Barclaycard pay Tesco 98 (Barclaycard are now down 98)
Day 40 - You pay Barclaycard 100 (Barclaycard are now up 2)
That 2 (their commission) has to do everything than MattLFC has outlined. In addition it has to pay Mastercard/Visa who may take as much as 1 of it. Also consider that for 37 days they are out of pocket to the tune of 98, this has to be borrowed from somewhere and banks like Barclays struggle to borrow anywhere near as cheaply as they have in the past.
I understand the logic of the arguments put forward on this thread but in reality I don't think this is necessarily the case.
Personally I know I cost the Card Providers money. I never pay interest, fees or charges, and I maximize all interest free periods be they promotional or standard. Yet I currently have facilities mounting to 105k of credit and I have never had a limit decrease.
I think the decisions to decrease a limit are a lot more complex than the logic that has been suggested and the Card Providers are not going to release this to the general public.
I understand the logic of the arguments put forward on this thread but in reality I don't think this is necessarily the case.
Personally I know I cost the Card Providers money. I never pay interest, fees or charges, and I maximize all interest free periods be they promotional or standard. Yet I currently have facilities mounting to 105k of credit and I have never had a limit decrease.
I think the decisions to decrease a limit are a lot more complex than the logic that has been suggested and the Card Providers are not going to release this to the general public.
You don't cost them money - you make them very little money, but you do make them money as other posters have pointed out. People who pay interest make them a lot more money!
Also worth pointing out that if I have a 10k limit then that 10k is ringfenced, they can't do anything with it. It sits there (I assume earning interest) until I spend it. By reducing your limit they are reallocating the money to someone who made use of it.
The fact they're coming up with stupid figures that are leaving you short on your limits is probably due to a rubbish algorithm that recalculates the limit!
If you're paying off in full.. then you have the money elsewhere.. no problem
The fact they're coming up with stupid figures that are leaving you short on your limits is probably due to a rubbish algorithm that recalculates the limit!
I agree with you here, much more likely than them using some special technique to pick out the customers due a limit decrease.
The only way card companies make money is from people who don't pay their balance off every month
.........and every time a customer uses his/her card to make a purchase as obviously the retailer will pay the card supplier for that use. Some of that will go back into admin costs, but by no means all of it.
I'd class my self as having an exemplary credit history, but that has not waived me of a credit limit decrease. The only time it happened to me was about 3 years ago with AMEX who slashed 9K off my available credit of 11k. No logic seemed to explain the decrease as I sometimes used up to 50% per month of what was available, always paying back in full. My financial position was at it's strongest, debt at its lowest ever ! I don't beleive the 'credit crunch' is anything to do with these cuts to existing customers and it is as others believe simply down to a badly programmed systems. I believe the credit crunch only plays a part when new applications, extended credit is considered.
BTW, I think I see where you are coming from, and understand what you mean, but if so (it's the first choice from above I am thinking to be true), then I am afraid you do ultimately lose them money, and don't make them a penny.
If for nothing else, you are taking x amount out each month, of the money they have for investing, lending etc, and then not having to pay any fee for doing so.
It's a no-win situation for them, they are constantly x amount in debt to their finances as a result of you loaning money each month, and never making a penny out of it. The next month, they have to do the same thing and again, the month after that etc...
So really, the only person who is benefitting from the deal, is yourself.
:)
I do understand where you are coming from, and the banks love to tell people this, but actually, the first point at which they make money on credit cards is by charging the supplier of the goods and services for offering this form of payment. As you will probably be aware, they don't charge what it actually costs them to provide the payments, but a percentage which will be calibrated to make them money. The bit about earning from the interest paid by people who leave a balance outstanding on their credit cards is an added bonus for credit card provider and was a novel development on from the original concept of a charge card like Diners/Amex etc.
Thus the point I am trying to make (without moaning, honestly), is that if they cut my credit limit to such a low level that I cannot actually use their card, they have cut off their nose to spite their face. They may not earn interest from me, but if they do no allow me to spend on their card, they miss out on charging the suppliers of goods and services the £600 to £700 a month which is where the primary point of offering credit cards in the first place comes in. That source of revenue will be closed to them and they are left with no income from me as a customer. That can't be in their best interest either.
Oh, and because Sky's name is on the card, it actually tarnishes Sky's reputation in my mind and makes me think about switching to a rival - Virgin, Freesat, BT etc. I think Sky should be a little concerned about that too.
Quite simple, really.
It's not Sky's card and the people who run the card don't own the card either. It's the people who supply the banking to them who've just realised that they don't actually have access to those amounts of cash should everyone start spending to their limit. I believe it's call the Credit Crunch AKA reality.
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