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Any route to appeal credit limit?

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  • Mr. AC

    The credit limit on my Barclaycard Premium plus is way too low. It’s not quite the laughable 200 or 300 some got – it’s 2500. However that is still lower than almost any business class flight I want to buy! I called them and asked if I can pre-pay the credit card account with e.g. 10k so that I can pay for some flights – the answer was a resounding no. I’ve had the card for 2 months now, but the app still denied a credit limit increase. The CS guy said that if I was denied in the app, he can’t do anything else.

    Is there any route to appeal this? E.g. I recall writing to Virgin Money, sending them a physical letter with a bank statement and payslips which upped the credit limit significantly.

    In general I find it amazing that Barclaycard spends so much money on PR and incentives only to then shoot themselves in the foot… They must see in the credit report that I have an Amex Platinum with god knows how much spending power and a bunch of other Amex cards with credit lines that I’m not using. I guess the fact that Amex gave me high credit limits is a sort of defensive moves against other providers that can’t wrap their head around this!

    I could kind of get why Barclaycard would deny an application from someone like myself. I have a lot of cards in my credit history with 0 times I’ve ever paid interest on them, so a scoring model could infer that I’d be a loss-making customer. But approving me, giving me 125k Avios, but then PREVENTING me from spending money with BA on the card – this seems to make absolutely no sense!

    Gary_Dexter

    You may have maxed your credit to income ratio in Barclays eyes.

    If you’ve asked for a higher limit and they’ve said no there’s nothing more you can do other than using the card and asking again in circa 6 months time

    Dudulle

    You can prepay the card by bank transfer. I’ve done it many times, sometimes overpaying 10-20k. Never had any issue.

    BA Flyer IHG Stayer

    You say you have other unutilised credit limits on other cards.

    Perhaps consider reducing the limits or cancelling some of those other cards. Other people say they have done that and then had their limit increased on their new card.

    If Barclays thinks because of your income you qualify for say £50k of credit in toto but your other cards are already £47.5k they are only going to give you a £2.5k limit.

    Reduce the other cards to £40k then they have £10k headroom to consider offering as a credit limit to you.

    BTW those £200 limits were increased once people had submitted further evidence of income to Barclays.

    Gary_Dexter

    You can prepay the card by bank transfer. I’ve done it many times, sometimes overpaying 10-20k. Never had any issue.

    Putting a credit card purposefully into a positive balance is actually against the terms of use for credit cards.

    Andrew.

    You can prepay the card by bank transfer. I’ve done it many times, sometimes overpaying 10-20k. Never had any issue.

    Putting a credit card purposefully into a positive balance is actually against the terms of use for credit cards.

    My old National & Provincial Visa Card (white label BoS) used to pay credit interest on positive balances.

    Dudulle

    Putting a credit card purposefully into a positive balance is actually against the terms of use for credit cards.

    Not on this one. Their terms just say they have the right to return a positive balance to you bank account.

    JDB

    Putting a credit card purposefully into a positive balance is actually against the terms of use for credit cards.

    Not on this one. Their terms just say they have the right to return a positive balance to you bank account.

    It applies to this card in the same way as any other. It is a technical breach of your credit limit and you aren’t entitled to make transactions in excess of your credit limit even if the account is overfunded. Credit card companies are not licensed as deposit takers and don’t offer FSCS protection so to the extent that positive balances are temporary and created in the ordinary course of transactions (eg refunds) that is OK but otherwise not. That’s why Amex in particular gets quite antsy about repaying such balances.

    Mr. AC

    Thank you everyone for your thoughts.

    Not on this one. Their terms just say they have the right to return a positive balance to you bank account.

    Should have probably asked here before calling them… Now that CS told me not to do it explicitly, I don’t think I’d be comfortable trying to prepay the card.

    Froggee

    @JDB I have memories of Creation sending a snarky text message saying prefunding a credit card account was a breach of the credit agreement but couldn’t see any such wording in the credit agreement. I can understand that they would prefer if customers didn’t do this however given it avoided interest charges. Is this written somewhere in legislation?

    As for Amex repaying balances, that’s news to me. They just let me quietly work my way through a £10k refund when Covid nixed my Tokyo Olympic plans.

    JDB

    @JDB I have memories of Creation sending a snarky text message saying prefunding a credit card account was a breach of the credit agreement but couldn’t see any such wording in the credit agreement. I can understand that they would prefer if customers didn’t do this however given it avoided interest charges. Is this written somewhere in legislation?

    As for Amex repaying balances, that’s news to me. They just let me quietly work my way through a £10k refund when Covid nixed my Tokyo Olympic plans.

    It is in paragraph 16 of the terms:- “As this is a credit agreement, we will never pay interest
    to you for any balance on the account and you should not keep money in your account. For this reason, you need to make sure that you don’t pay more than your total outstanding balance (which would create a ‘positive balance’)
    .”

    It is precisely because it is a credit agreement that you aren’t allowed to overpay. I’m not sure whether with Barclays, per the original question if you had a £2,500 limit and paid in an extra £1,000 you could then make a single transaction of £3,000 or if they will decline a transaction over your limit even if funded. The Tesco card used to apply that rule. I think with Creation what was happening was that people made transactions up to their limit, then paid the balance and while the available balance was quickly updated, as the payment hadn’t cleared it triggered a double alarm.

    Re Amex, my wife had a relatively small refund on a card she didn’t use much and they sent a letter asking her to contact them immediately re repaying or transferring the credit and when she ignored it, they telephoned a few weeks later to chase.

    Froggee

    @JDB you tricked me! Sorry I was talking about Creation and their incompetence, not the somewhat better Barclays (despite what many here say). But you tricked me enough to revisit my creation credit agreements and they updated them at some point as the original one I had for the Premium card made no mention of overpaying whereas the one I got with my credit-card-for-a-week white card explicitly stated that I must not overpay.

    It’s fascinating stuff.

    Vaguely back on message, I have a friend who wanted to buy a £41k car on Amex from Cazoo and his limit was £40k. Cazoo would not budge on price and would only take a single payment. Amex would not budge on the credit limit. So his wife bought some clothes, paid the bill, and promptly returned the clothes to get an extra grand headroom and it worked a charm. It seemed somewhat convoluted to me but she is a highly competent accountant and undoubtedly had the credit agreement committed to memory.

    A £250 statement credit and 61,500 Avios probably made it worthwhile in this case.

    Oh – the car turned out to be a complete lemon but outside the warranty period which licked bag.

    JDB

    @Froggee Amex has a similar term but as we know they have lots of terms and policies that they don’t enforce until they do. Your friend must be part of the flasherati requiring a second hand lemon/car for £41k when she could have avoided all that buying (on Amex) a new top of the range Ssangyong with all the bells and whistles and a seven year guarantee for under £40k.

    Froggee

    @JDB I was merely reporting, not judging, although I did tell him he was crazy nuts at the time.

    To be fair, his properly old car did decide to blow up at the worst possible time Covid-wise when there were huge waiting lists everywhere.

    I’m sure you understand the importance of having an expensive car for one mile London drives though, as otherwise the parking might seem like a lot of money. This way, parking is a rounding error…

    Luca M

    I have had a Barclaycard for over 20 years and for many of those years was my largest limit card and between two cards, I had just under £30k total limits.

    During covid they contacted me and said that had decided to reduce my limit and that it was a final decision and I could not appeal but after 6 months I could apply for an increase. The reduction on the largest limit card was down to 1/3 of the original card and the second card was reduced to match that. There are plenty of reports on financial sites that confirm Barclaycard did that during the first lock down to many customers, and they have since being more cautious with limits.

    Please note this is different that the £200 temp limits they give to new applicants that may not have a profile that include verified income.

    With regards to what Barclaycard can or cannot see about your credit lines, having had direct discussion (in almost a Conference call) with their underwriters, they basically cannot see who are the Credit Providers on your report, nor can identify if you have a rolling balance or simply spend similar amounts and repay in full every months. They would also not see the “spending power of a Charge Card but simply that it is a Charge Card product. They do see credit limits, monthly balances at the time they receive the provider feed, and if payments are made in time and/or just to the min payment required (and again not if you do or not pay interest on those balances).

    However as others have said, based on your credit file and the profile each bank creates for you, you would have a total credit limit risk that each bank consider appropriate.

    I have noted myself that when my total credit limits (excluding Amex Chargecard risk, across 7-10 CC cards) reach about 150% of my annual income, I start to get declined or get lower limits that I am used to, but when I then either close some cards or I reduce the limits on some others, I get approved and do get decent limits on new cards. So do consider closing or reducing limits on some of your other CCs and wait about 3 months before applying for a CC limit increase in your Barclaycard App.

    Mr. AC

    I have noted myself that when my total credit limits (excluding Amex Chargecard risk, across 7-10 CC cards) reach about 150% of my annual income

    Wow, I’m not even remotely close to that. My current total credit limits are barely above 25% of my annual income…

    Tried requesting a credit limit increase again after decreasing credit limits with one of my Amex cards and waiting a month – still no dice. Honestly I’m rather mystified.

    WaynedP

    Also wanted to buy a second hand car to replace my aging dirty diesel before ULEZ expansion and a good deal came up on Cazoo last October.

    Same story, Cazoo would not split payments and would only take Visa/MC.

    My Virgin Rewards Plus CC had its original 14k credit limit, which I asked Virgin to increase, but they could only manage 19k which was £950 short of purchase price (probably because I took out zero balance transfer card earlier in 2022 to pay off 15k new double glazed windows interest-free over 20 months and will cancel card after that).

    Virgin Client Service chap told me that overpaying 1k into my CC would be breach of terms (I realise they have no choice but to say that) but I did it anyway and completed the £19,950 transaction without problem, even with a 19k limit.

    Only got reward miles for the 19k, not 19,950 but didn’t expect anything else.

    I’ll reduce credit limit back to more sensible 12k-14k in 3 months time (Virgin only allow one change per 6 months) and ditch free balance transfer card later this year which should restore credit-friendly balance between number of cards, limits for each and total credit limit vs annual income.

    90 day Cazoo warranty just expired, so hoping my experience doesn’t follow Froggee’s friend and reveal a lemon.

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