Barclaycard slashed my £6,500 credit limit to £250

Can you ask Barclaycard to explain its bizarre decision to slash my husband’s credit limit from £6,500 to £250? He has held the card for many years and paid the balance in full every month. No explanation has been offered. We are retired and our income hasn’t changed.

The only reason we can think of is that we are embroiled in a long discussion with Barclaycard about a £500 refund for a cancelled flight with Iberia that we booked more than a year ago with the card.

A credit card with a £250 credit limit is somewhat useless. What on earth is going on?

SW, by email

If it is any consolation, you are by no means alone. At least 100,000 Barclaycard customers, many long standing, have reportedly been affected. Many – like you – have been given a completely useless £250 credit limit.

This week the company – part of Barclays – has been trying to limit the PR fallout from these letters. It’s not a good look when you tell customers of more than 50 years that you are effectively abandoning them without a proper explanation. I could understand it if you had been furloughed, or owed large sums on other credit cards, but that isn’t the case.

There have been claims the bank has targeted customers who pay off their balance in full each month, and therefore make it less money because they don’t pay interest. This it denied.

One thing I can clear up is that Barclaycard maintains its stance is nothing to do with your section 75 flight claim which, in fairness, has been correctly turned down on the basis the cancelled flight was booked via a travel agent.

It says the letters were sent out following a review of its customers’ finances across its full lending portfolio, “to ensure we are lending responsibly, and that they are not borrowing more than they can comfortably afford”. In short, it is seeking to limit its liabilities as the economy emerges from Covid.

It says customers who feel they can afford a higher limit should appeal. They have to provide the required proof of income by the end of May.

You can either go through the appeal process, or simply apply for a new card with another provider. Those with clean credit histories and reasonable incomes will have no problem getting one elsewhere.

I know what I would be doing.

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