Thomas Cook did the same with my credit card (which I only got because it was free of CC charges if you used it to pay for holiday) In March they reduced limit from £10,000 to £465 !! They said because I hadn't used it for several months. Explained I only used it for holidays and only tended to have one big holiday a year.!
Anyway just got a CC from my bank 0% interest for 9 months !
TC now charge for use of their own CC when booking a holiday so I wouldn't have used it again anyway.....

Denny

It seems alot of the credit card companys are cutting there customers credit limit, all because the card not getting used, and now with the new laws, there just cant increase credit limits, of load all of there old customers, and get in new customers

i am now having to plan for next year, and looks like I will have to pay up cash of £100 every month towards my holiday

Credit card payment are getting cut from £300 a month to £150, this is getting done by agreement, and I must give up my card, so it can no longer be used

Hi joeseptuk, it will depend a lot on what your overall credit position is, but it might be worth inquiring about taking out a new card with another bank and transferring your balance. Some of them have extremely generous interest free offers at the moment and on that sort of outstanding balance, you could save yourself a lot and probably manage to reduce the balance quicker.

But the banks as a whole do seem to be approaching the current situation very differently depedning on the bank. I bank with HBOS and had a credit card with them for some time but haven't used it much for some time. On the advice of a member of staff at my local branch, I closed this account down and 30 days later opened up a new one with them with a raised credit limit £12,500 and an opening offer of 12 months interest free for purchases and 9 months for balance transfers. So guess how my kitchen renovations are being paid for? You got it - the money I'd saved up is staying in the bank and earning interest and the kitchen bill will go on the card and be settled in full 12 months hence.

On the other hand, I've also had a Santander card for even longer which was only taken out because I could be sure it would be accepted in Cuba in the event of needing cash or to pay for things in an emergency. At my request the original £10,000 credit limit was reduced to £2,000 while the account was inactive. I'm going back to Cuba this June and what with ash clouds and everything decided that £2,000 pounds wasn't much of a buffer, so when I phoned to re-activate the account I asked about reverting to the original credit limit. This they refused to do even though acknowledging that the account had been run impeccably and that whenever it has been used the balance had always been paid in full! Incidentally, I also have my mortgage with them and this is despite that always being paid promptly and even overpayments being made at times to reduce the balance quicker!

I have to admit, I've been a bit of a 'credit card tart' over the years - I've paid for every Cuba trip by taking out a new card with a decent interest free offer and then set-up a monthly standing order to pay off the balance by the end of the offer period. But I've been lazy about cancelling them which means that if I add the total credit up, I could go out and borrow over £50,000 today! it seems so daft - if only I could transfer the credit limits between cards (instgead of any actual debt which they are always writing to ask me to do!) I'd have credit limit on the Santander card that I could afford to live off for a year in Cuba and not just an extra week if my return flight ends up cancelled!

SM

It seems to me that the banks/CC companies can't win.
Remember when people were blaming them for lending money too easily to people who couldn't afford to pay, and now when they cut the limits down to stop people getting further into debt before they have paid off what they already owe, they are acting irresponsibly. ?
You can't have it both ways.
Credit on cards is open ended and unsecured, and banks have to reserve some capital to cover potential, as well as actual borrowing by customers.
Your spending and credit rating has to be taken into account and some old people who have had a CC for years find that their available credit has been reduced when they turn 70/75 years old, there is no loyalty, credit card companies give you unearned cash, that makes you their debtor and that debt has to be paid back through obligation, and as you get older, your chances of dying increase, so the company has to try and protect itself.

Should they tell you that they have prevented you from getting further into debt by reducing the amount available? well do you let them know that you are borrowing money that will increase your monthly payments that you can't afford.?
IMO: If you give some people a £5,000 limit they will spend £5,000, if you give someone £10,000 limit they will go to £10,000. and it's time people stopped piling on the credit when they can't afford it.
I could go out tomorrow and rack up £10,000 on my CC for a new car, but could I afford to pay back the monthly repayment out of a state pension.?

Like I said, you can't have it both ways.

Sanji

I have only ever had one credit card and every year the Card Company increased the limit until I had credit of £18,500 !!!.

The most credit I ever run up was £2,500. Sometimes I did not manage to pay it all off at once but I always paid well in excess of the minimum payment and was never late with the payment. About 2 years ago I cleared the balance and then only used it for holidays or major purchases in order to gain the protection given by paying by credit card and also for the peace of mind should it be needed on holiday for anything not covered by insurance.
Since paying it off in full 2 years ago, I have paid it in full each month when there has been any balance.
The Credit Card Company's reaction ? Cut my limit to £1,000, so last month when I was buying a new suite had to pay by debit card.
Considering that over the years when I did not pay in full and was charged hefty interest I would have thought a £3,000 or even £5,000 limit might have been more sensible. After all if I had bought a suite at £2,000 I might (for all they know) not cleared it all at once and they could have made more money out of me

Am I right in thinking you owe £8500 to the credit card company already or have I read that wrong?

Like I said, you can't have it both ways.

But, Sanji, it seems to me that that is exactly what I have! Two different banks, bank accounts with each (forgot to say that as well as the mortgage I also have a 2nd cheque account with Santander!), credit cards with each, same pattern of card useage with each, same person, same credit history yet two very different responses. What I would really like to to do is rationalise my credit card collection but this sort of situation makes me wonder whether I should because there are so many reports of peopl who have managed their accounts well then ending up with unfeasibly low credit limits.

One of the frequent pieces of advice given here is to pay for a holiday using a credit card because you get more consumer protection in the event of the company going bust than you do if you pay cash either via a debit card or a cheque (soon to be buried too!). As HelenC discovered, a credit limit of £1,000 wasn't even enough for her to be able to use her CC for a new suite - you've no chance of paying for a holiday for a family of 4 with one. The people who seem to be penalised by these new policies are the people who use their cards sensibly and responsibly which makes me think that this has less to do with responsble lending and a whole lot more to do with getting rid of the customers that they don't make very much money out of.

SM

I'm also very much a credit card tart and we have quite a collection.

I know this is off topic but as SM says I would certainly look at applying for another card if you can and shifting that debt to a % deal or low lifetime balance .Your card company must be rubbing it's hands together and you must be paying an unnecessary fortune in interest and no doubt most of your payment each month is just covering the interest if you have 8.5k on it . Have a read here http://www.moneysavingexpert.com/cards/balance-transfer-credit-cards.

I always run a holiday "debt " . seperately on our barclaycard . I make the purchase on our normal card and then transfer it to barclaycard who offer 6.9% for lifetime to exisiting customers . Thats all that I keep on there and thats' the golden rule . I pay off £400 a month and quite often have 5/6K on there when holidays have just been paid but I don't pay a lot in interest.

All other normal spending is also done on a cc but I keep it seperately on another card and pay all that off at the end of the month.

Barclaycard will probably cotton on soon that they arn't making a fortune out of me because I dont use their card for anything else. No doubt our credit will be cut accordingly soon too.

which makes me think that this has less to do with responsble lending and a whole lot more to do with getting rid of the customers that they don't make very much money out of.

You may be right, but they are a business taking risks with money and of course they need to make money, and one can hope that because the whole financial time bomb has exploded, they have to be more selective now.

Two different banks, bank accounts with each (forgot to say that as well as the mortgage I also have a 2nd cheque account with Santander!), credit cards with each, same pattern of card useage with each, same person, same credit history yet two very different responses.

It might having nothing to do with you on a personal level and how you conduct your finances, It could be because two different banks will or might be in two different financial situations, one may have excellent liquid assets, whilst the other one may not.
In simple terms, look what happened to Northern Rock lending out 125% mortgages to people who couldn't afford the repayments, and then with no money coming in, NR had to keep borrowing more and more from other banks via the interbanking system, until the other banks said "we're pulling the plug, enough is enough, pay back some of what you've borrowed" and within days Northern Rock collapsed because it was existing on credit, the same as XL.
So, you can bring that back down to street level and banks/CC companies being heavily critised for reckless lending in the past and enticing people to get into debt beyond their capabilities of sorting it out, now saying "enough is enough until you pay back what you owe" or because of the global financial situation, simply not having the cash to ‘promise' to lend out on CC limits.

IMO: There are two ways to look at this, firstly if I have £10,000 available on my CC, but looking at my spending pattern I have never gone over £2,000 and I've paid it off immediately, then why should the bank/CC company continue to lend me or make available £10,000.? if I don't use it, it's a service of " allocated dead money" to them....money that they could make available to someone else and make money from it.
It's not my money, it's not me taking the risk, it's them that's making available their money, unlike a Debit Card where the money is mine and if you pay for goods on the CC between £100 and £30,000 you get the same amount of protection.

The other scenario is that I have a £10,000 limit on my CC and already owe £9,000 and I'm struggling paying back the minimum each month and I want to bang another £1,000 on it for a holiday, well don't you think that's being reckless and for once the banks/CC companies are acting responsible by preventing me from getting further into debt..?
I must admit that I'm a cash tart, plastic is alien to me and if I want a holiday I will pay for it on the CC for the protection, but the cash is here ready to pay the statement as soon as it falls through the letterbox, I personally would never take a holiday and be paying for it months afterwards, the golden sands and the lapping of the waves are a distant memory 6 months later when the statement continues to arrive every month, and not everybody is clued up and savvy enough to get the best out of plastic....they just see the £ signs.

I hate CC's with vengeance; they can ruin people's lives when plastic becomes your master and it's just so easy to get sucked in if you're not strong enough to say the magic word NO!
The world spins on credit, but even credit has its limitations.

Sanji

I hate CC's with vengeance; they can ruin people's lives when plastic becomes your master

That is very very true shirley . You have to be very disiplined , understand how they make their money , where they get you , follow the do's and dont's and only then can they be our friends .

I have made mistakes when we were younger but I learnt very quickly and now make sure that should we need to we can pay our "holiday account " from other funds if it became necessary .I would prefer not to cash those in but if needed we can .

When our lads don't holiday with us any more and 2 weeks in the sun doesnt cost us 4/5K we won't hopefully have that big bill . Just for now I'm happy to make the most of our time with the boys while they still want to come with us and throw caution to the wind . Now the older 2 are 19 and 17 this year will probably be their last and we will be a long time holidaying on our own .

lyn

IMO: There are two ways to look at this, firstly if I have £10,000 available on my CC, but looking at my spending pattern I have never gone over £2,000 and I've paid it off immediately, then why should the bank/CC company continue to lend me or make available £10,000.? if I don't use it, it's a service of " allocated dead money" to them....money that they could make available to someone else and make money from it

This happened to me. Many moons ago I started off with a £50 overdraft with Lloyds Bank. Somehow, over the years the overdraft had increased to the silly amount of £3,100 - none of which I've asked for. I've never used more than around £800, and eventually last year, I had a leter saying they were cutting my overdraft to £1,000. There was the offer to phone them up for a chat if I didn't agree with the decision.

if I want a holiday I will pay for it on the CC for the protection, but the cash is here ready to pay the statement as soon as it falls through the letterbox

,

I'm exactly the same Sanji but I suppose I'm in the fortunate position of both hubby and I being in steady employment. I don't know what I'd do if I didn't have ready money. Although I live for my holidays I don't think I'd be reckless enough to pay for one on the CC knowing I'd be coughing up the bill months afterwards.

I'm reminded of when hubby and I were first married with our first joint current account. I can't remember exactly how much of an overdraft we were given but whenever we used to check our balance, if we hadn't used the full amount available to us, we used to say 'oh, we're doing ok we've still got such and such in the account'. Of course, it was never ours to start with but being young and financially inexperienced we often used to live in our OD Nowadays, luckily for us, we never use it- not even sure how much it is.

Although I live for my holidays I don't think I'd be reckless enough to pay for one on the CC knowing I'd be coughing up the bill months afterwards.

And if you're reckless enough to pay for a holiday on the CC, which brings you to the limit with no leeway, what are you going to do if you're stuck in another country longer than expected.? I saw plenty of that in Benidorm because of the ash cloud.
What happens if you're paying for the holiday 6 months later and during that time unexpectedly the car needs major repairs, or the washing machine blows up, or the fridge freezer dies.? Are you going to borrow some more and have the tentacles of the CC companies wrapped around you squeezing tighter and tighter.?
I'm not being judgemental (honest) but my philosophy has always been that it doesn't matter whether you pay for it before or afterwards, you're still going to have to pay it back, whether it's next month, next year or a few years down the line"¦.the banks/CC companies do eventually catch up with you, you can't run forever.

I've been young and foolish, I've made some cr@p decisions in my life, and I've been as poor as a church mouse and laid in bed worrying where the next penny is going to come from, and we never had the ‘cushion' of an overdraft because David worked for the bank and we were never allowed to be one penny overdrawn, the banks rules were that if you can't manage your own finances, then you're not fit to manage someone else's, and handling millions of pounds a day would be too much temptation.

I was taught that if you can't save up for it beforehand, then you can't afford it, and the longer you have to wait for it, the more you'll appreciate it"¦.of course I'm not talking of buying a house.
It seems to have worked for me and apart from in the past having a mortgage and a loan from the bank for a car, which is all done with now and my little Fiesta is 12 years old."¦I owe no beggar anything today and believe me, it's a great feeling, but they still send in the junk mail the "offers" to borrow, to a pair of pensioners living on a fixed income .???????????
Yeah, I might have an excellent credit rating because I haven't borrowed much and I've paid it back as per the agreement, but are these people mad or do they have no morals wanting to put OAP's into debt.?

Sanji

I agree with all of your above points Sanji. Just want to add though that sometimes you are penalised for not having a credit rating e.g. never have had a CC. When my son applied for a loan for a car a few years ago, he was turned down because he'd never had any other loans and didn't own a credit card. The reasoning behind it is that the cc companies don't know how he handles money and debt as he's never had any. As sson as he got a credit card, started using it and paying it off on time, he had a loan application accepted.

I've had to really coax my youngest to take out a cc eventhough he didn't want one and was quite happy to pay for everything as he got it as I know he intends applying for a loan for a new car soon. He just needed something to show he had a credit rating. I'm glad to say he's using it very responsibly (probably because he's in the lucky position of having a good job), so much so that he's paranoid about forgetting a payment and ends up paying too much.

Shirley

He should set up a direct debit to pay off the CC bill in full each month. That's what I do and I don't have to worry about it being due when I'm on holiday, etc.

luci

Sanji - I think you & I are of the same generation. I have always saved to buy things we needed. If we didn't have the money then we couldn't buy. Hubby was on strike for over a year, & we watched friends & neighbours enjoying themselves, and although it was one hell of a struggle, we never went into debt. Nowadays with the kids having flown the nest & both of us working, I do have a credit card, & to be honest, I pay for nearly everything with it ( points mean holiday vouchers), but I always clear it every month. I could never sleep at night, knowing that I owed people money & there was a possibility that we couldn't pay!

Helen
I'm with you and Sanji on this. I was brought up with the 'if you can't afford it, you do without it' philosophy. We struggled for years when we were younger and now are in a fortunate position.
I put holiday deposits on my cc, petrol, clothes shopping etc but pay the bill in full when it comes in. I don't usually put holiday balances on because I don't like paying the credit card charges that you get with expensive holidays. They usually get paid by debit card.

Must admit i don't have a credit card nor do I want one, I pay for things by debit card (cheques now out of fashion) - I was brought up by my folks if you can't afford to pay for it now then you can't afford it at all. I know some of the comments where some folks pay for things by CC and keep the money in the bank then settle off later, that's great if it works for you.

Horses for courses I guess

What an interesting thread with as usual great stuff from Sanji and SMA, it is a good feeling being retired and not owing anyone a penny, Although I have borrowed plenty in my time I would never have a holiday on credit.