SIMON LAMBERT: My credit card limit is back to where it was when I earned £80-a-week as a barman in the Alps – thanks Barclaycard
Barclaycard has spectacularly shot itself in the foot.
For some unexplained reason – and I say this because the reasons it has given don’t make sense – the credit card company decided to go on a brutal cull of customers’ credit limits.
Many have been customers for years, say they have never missed a payment and have steady finances, but have seen their limits cut by 90 per cent or more.
A steady stream of Barclaycard customers have complained to us that these new limits are so low as to be almost useless to them when it comes to big purchases or booking holidays – the kind of spending many use a credit card for.
Unsurprisingly, the fight back has been fierce. Angry Barclaycard customers have contacted us in their droves since we first reported on the story a week ago.
A steady stream of Barclaycard customers have complained to us about credit limit cuts
Declaring my interest, I have felt this customer service disaster personally, as I’m one of those affected.
My credit limit has been cut from £8,500 to £1,000 for no discernible reason.
It’s gone from being higher than I would ever need, to barely enough to book school holiday flights for my family of four.
What makes the scenario even more galling is that Barclaycard had previously spent years ratcheting up my credit limit without being asked – £500 here, £1,000 there – and asking me to opt out rather than opt in for increased credit.
I’ve also been told that I cannot ask for the credit limit to be raised from its new lowly £1,000 level for at least four months, as I missed a supposed deadline to contact Barclaycard after the letter went to my old address.
I had updated my address on 15 February and the letter sent out simply says February 2021, with no specific date, so presumably the two events crossed.
It told me that I had to contact Barclaycard, or had until 31 March to spend some money to keep my old credit limit.
Barclaycard admitted there had been a mix-up on the address, but when I asked if my limit could be retained I was told that couldn’t happen and I would have to wait four months and then make an application for a new higher limit.
I asked why my limit had been cut and the customer services assistant told me it was due to the impact of the coronavirus crisis on finances.
However, when quizzed she admitted that Barclaycard had no idea whether my finances had been affected and nor did it have any information on file about my earnings.
In fact, in my more than 20 years as a Barclaycard customer, I don’t recall it ever asking for any information about my finances.
I opened the card at the age of 18, just before I went to work in the French Alps as a barman earning the princely sum of £80 a week, plus board, lodgings and a season ski pass, and I think my limit now is roughly back to what it was then.
When I called Barclaycard it told me that my credit limit was being reduced due to the impact of coronavirus on people’s finances… yet, illogically, if I spent more money by a deadline I could have kept my old limit
My experience echoes that of the hundreds of readers who have emailed us to tell us about their Barclaycard woes.
A common thread running through the stories is that Barclaycard has blamed the economic impact of coronavirus, but not actually checked up on individual’s finances.
Illogically, while Barclaycard has claimed that reductions are due to the potential effects of the pandemic on people’s finances, it has then told them that if they spend some money their limit won’t be cut.
Barclaycard has blamed the economic impact of coronavirus, but not actually checked up on individual’s finances
Barclaycard denies this is a cull of unprofitable customers – the type who don’t borrow too much and pay off bills in full – but as one of those affected it certainly feels like one.
In light of the meltdown, This is Money is calling on Barclaycard to come to its senses and reverse the cuts for those whose finances haven’t changed and want to keep their old limits.
So far, it is sticking to its guns – and you can read more and get Barclaycard’s side of the story here.
Someone, somewhere at Barclaycard decided this was a good idea. Maybe they thought if people complained it wouldn’t matter too much, as certainly the profile of those we’ve heard from doesn’t fit with that of profitable credit card customers.
Yet even if it does reverse the cuts, the damage is done. You upset loyal customers at your peril, as the very vocal backlash against Barclaycard shows.