My credit card keeps being refused despite always being within the credit limit and having an impeccable record for paying off my bill. Even after calling my credit card company the card still often remains blocked. I have worked as a credit controller so am fully aware I am suffering this well above the average consumer level.

I'm wondering if this is a sneaky way to get rid of customers who never pay interest and cost the credit card company in lost revenue providing the service.

Quite possible and indeed would'nt suprise me..

I've found recently that as I pay off my balance, so my credit limit is plummetting down to just above whatever the rpesent balance it is.

Ie 3 years ago, I had a 10k limit, with a balance of about 8k, as I paid of at say 1-2k a time in lumps, it drops so I presently owe about £2.5k and mt limit is £2.7k.

Arguably I am paying much less in inrterest than I was, although the rates also have crept up.

I am also still able to spend using it, but cannot use cashpoints with it.

Who are your providers? Mine are MBNA.

I'm wondering if this is a sneaky way to get rid of customers who never pay interest and cost the credit card company in lost revenue providing the service.

It is. Credit card companies don't want you if you aren't going to make them money.

It's also not commonly known that your credit rating doesn't depend on how likely you are to repay your debt, but how much money the company can make from you.

I think this is about the banks, sensibly, limiting their possible exposure. My credit cards used to have silly limits that I didn't ask for and would never have used, and have recently been brought back to something more rational. One card was cancelled as I hadn't used it in three years, the other was brought back to about 10% of my salary. Before, I could have walked out with about 25K no questions asked, daft really.

one card I had the credit limit was reduced from £13k to £100 overnight, called them up cancelled card and closed all my accounts with them.

The balance was paid of in full every month, not the type of customer they want I guess.

Who are your providers?

Barclaycard

The balance was paid of in full every month, not the type of customer they want I guess.

Of course not! Banks aren't charities. Why would they offer you credit for free?

Why would they offer you credit for free?

well they were looking after my £10k+ I had in accounts with them 🙄

Banks aren't charities. Why would they offer you credit for free?

Well they do get ~2.5% off the retailer from every transaction.
That's alot of money across the nation.

Some of the banks were rather keen to accept the charity of the taxpayer recently!

Well they do get ~2.5% off the retailer from every transaction

I think Visa gets that, do they not?

thekingisdead – Member

Some of the banks were rather keen to accept the charity of the taxpayer recently!

None of the Banks got "charity" from the taxpayer, They all received various loans and guarantees which will require to paid back to the government/taxpayer – with a substantial amount of interest. The shares which HMG now hold in RBS and LBG will be sold off when they've made a profit.

Well yes druid, I was being facetious. should have used a ";-)"

I think Visa gets that, do they not?

Good point! ;-0

Solamanda, same with me actually, Barclaycard too! I pay my CC bill every month and a few weeks ago everything I put through it was declined/blocked due to suspected fraud. Seems ok for the time being.
Never thought they wanted rid of me though….

I'm with barclaycard, have been for years. I am on a legacy cashback deal which is 2%. I pay it off every month so I must be stripping out 50% of their margin. I've never had one of these calls, never had the credit limit reduced.

I guess they must get some of the transaction

@solamanda

Most credit card issuers are running with low floor limits and high levels of online authorisation.

How are you using the card? There are counters which control the number of offline auth's the chip will allow before the next transaction must go online. If the terminal cannot go online then you will get declined until you dip the card into an online terminal. Using an ATM to change the PIN is sufficent.

I'd request a new card as you will get a more upto date chip and contactless thrown in.

It is highly unlikely Barclaycard wants to rid of you, all credit card companies make money on your purchases – just not as much as if you pay their (crippling) interest rates.

As someone who works pretty closely with card payment processing in retail I'd be really pi$$ed off with the banks if they were doing this. I have noticed recently that the postcode my card company (Tesco) has is the old code and it fails unless I set that address on sites to match it. Could also be system bug with Barclaycard 🙂

there's also a "cash" limit, which seems to be permanent. Say you have a 4k limit, you'll have a 2k cash limit. As far as I can figure out, as soon as you've taken 2k out of cash machines, that's it, no more cash. ever.

of course I'm probably wrong, but that's the way it seems to me

and also of course, who in their right mind will take cash out of an ATM on their credit card when there's a cash handling charge that you don't pay if you buy goods with the very same card. Unless of course you happen to be visiting Canada & your debit cards don't work in the ATMs because your bank once upon a time heard of a possible debit card scam originating from (allegedly) Toronto. ooh no, that would never happen would it?

bitter, moi?

there's also a "cash" limit, which seems to be permanent. Say you have a 4k limit, you'll have a 2k cash limit. As far as I can figure out, as soon as you've taken 2k out of cash machines, that's it, no more cash. ever.

I think this might be due to balance transfers. Take the cash on a card which has low cash advance fees and use it to pay your mortgage, then if necessary transfer the balance to another card for 0% over x months. Repeat until credit on the transfer to card is used up – result was you had x months of 0% interest on however much you managed to pay off the house and had only paid perhaps 2.5%.

I know people who did this (me) with the likes of MBNA in 2007 when they offered me a stupid amount of money at 0% for 15 months transfered to my bank account for a fixed fee of £75! The MBNA deal was so dumb providing you made sure you paid it back on time – which I suspect not everybody did.

It's also not commonly known that your credit rating doesn't depend on how likely you are to repay your debt, but how much money the company can make from you.

Because it's not true

I pay my credit card off every month by direct debit.
Financial Rule #1. Never ever use the credit on your credit card.
I've had it refused in shops a few times for no apparent reason. I just used my debit card instead. It's always worked on line.

silverpigeon – Member
It's also not commonly known that your credit rating doesn't depend on how likely you are to repay your debt, but how much money the company can make from you.
Because it's not true

"Banks pick customers for their own good, NOT yours, so the scoring process is about profit not risk. Of course, risk plays a part, as those unlikely to repay are a threat to profits. Yet even the most solvent may be rejected if they're unlikely to act in a way that'll generate profit for lenders."
source

That's what I meant, Pembo 🙂

Curious though, if you've called the bank and they say it's clear, is it not just a card fault? Mine was. Wouldn't make too much sense to block your card as it would never give you the chance to pay them any interest.

Is this in shops or online/customer not present transactions? Your card can be blocked for not present transactions only- something as simple as an online purchase failing due to web problems can block a card, but still let you use it in shops.

Banks pick customers for their own good, NOT yours, so the scoring process is about profit not risk. Of course, risk plays a part, as those unlikely to repay are a threat to profits. Yet even the most solvent may be rejected if they're unlikely to act in a way that'll generate profit for lenders.

No, it is absolutely about creditworthiness first. The probability of default or the likelihood of repayment. Different products might be available according to the score obtained, but each product will be priced according to the likelihood of repayment. Naturally some lenders have a greater appetite for risk than others, though not so much these days.

That said, no credit history is almost as bad as a poor credit history and I agree that this results in solvent applicants sometimes being refused credit.

Of course profit is a consideration.Risk and and profit are inextricably linked since all credit pricing is risk based, but the establishment of risk comes first and that's a long way from saying credit scoring is all about profit rather than risk. Last year I sat on the working party of a major card provider that revised it's scorecard with sexy new algorithms to predict the probability of default. The focus for the firm involved was very much about getting that number as accurate as possible.

Respectfully suggest that this is a better source for info on credit scoring than Mr Lewis