Barclaycard has changed its mind about slashing some customers’ credit limits.
Some people have had letters saying that cuts of almost 100 per cent that were introduced in April will now be reversed.
The proposed cuts, which affected 100,000 customers, meant that some were left with credit limits that would not have covered the cost of a new TV or a family holiday. Gillian Wilder, a Barclays customer of more than 30 years, told The Times that her limit was being reduced from £13,500 to £250 — a 98 per cent cut.
Barclays said the decisions were based on affordability concerns, but some customers said they had never missed a payment or had any change in their financial circumstances.
The average UK credit score actually rose 11 per cent to 398 out of 700 between March 2020 and March 2021, according to the credit-checker ClearScore, which reports data from the credit reference agency Equifax.
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Louise Porter, 42, a teacher from Hampshire, was told in April that her limit was due to be reduced from £11,900 to £1,650 “to make sure it’s affordable for you”. She had never missed a payment in 20 years and always cleared her balance.
She sent details of her income to Barclaycard but was told on June 7 that her limit would still be reduced. Then on July 24, after no further contact with the bank, she had a letter saying that her limit would stay at £11,900.
The letter said: “We noticed some changes to your circumstances which have been recorded on your account.”
Porter said: “As far as I’m aware, my circumstances haven’t changed. I’m in the same job earning the same.”
Alexander Webster, a project manager from London, had the same letter. He was initially told in April that his limit would be reduced from £6,600 to £250, a cut of 96 per cent. Because he hadn’t used the card since 2019, he didn’t bother to challenge the decision. “Out of the blue I got another letter saying that they had decided my limit would remain the same, despite no communication from me”, said Webster, 37. “I’m not really sure that my circumstances changed at all in between those two letters.”
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The only thing he could point to was registering with Experian, one of the UK’s three main credit reference agencies, in May. He has lived at the same address in London for nine years. I’d find it surprising that this would affect my Barclaycard status.”
Barclaycard declined to share how many customers would have their old limits reinstated, and said the changes of heart were based on changing circumstances reported to credit reference agencies.
It said: “We have a duty of care to our customers to make sure their credit limits are affordable, using the most accurate and up-to-date information available.
“Our decisions take into account data held by credit reference agencies over multiple consecutive months, to ensure we have a robust understanding of the customer’s income, expenditure and credit commitments. If credit reference agencies inform us that the customer’s circumstances have changed we will review whether a limit change is still appropriate.”
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