He suggests that if Freeman intends to continue using his second card for shopping, and paying it off in full each month, he should consider a loyalty card (basing his choice on where he does most of his shopping) or a cashback card such as the Egg Money World MasterCard, which refunds 1% of the first £20,000 spent each year. If you are happy to let someone have that credit limit for all that time, it makes no sense to cut it now like this." If I were him I would cancel the card."Īndrew Hagger of website Moneynet agreed: "There is no reason for it. "However it's very poor customer service: Lloyds could at least have left him with half of the credit limit. If you've got a limited amount to lend, you want to lend it to people from whom you are going to make a profit. ![]() Kevin Mountford, credit card expert with financial products comparison website Moneysupermarket, said several banks had reduced customers' credit limits because they were not making full use of it, or avoiding paying interest: "It's all about profitability. But after writing to MBNA and enclosing a new cheque to restore his account to good standing, he was delighted to find the bank removed the charges, restored his 0% interest rate and extended it for 10 months. MBNA had levied a £12 late payment, cancelled the 0% promotional rate and charged him £212 in interest. Which? said: "Consumers looking for happy banking should steer clear of banks owned by the Lloyds Banking Group, as Bank of Scotland and Halifax sit at the bottom of the table, and Lloyds TSB and Cheltenham & Gloucester don't fare much better."įreeman discovered a cheque he sent to MBNA at the same time as the one to Lloyds had also gone missing. Lloyds TSB scored just 54% in the credit card category, compared with the top score of 83% earned by Smile. "As a responsible lender, we need to ensure we are providing credit at a suitable level for our customers, and where we reduce our customer's credit limits this is done to help them avoid building up debt they may struggle to pay off."īanks belonging to the Lloyds group scored badly in a Which? survey of customer satisfaction published today. We apologise for any inconvenience we have caused. We have reviewed this case and have now reinstated his credit limit. It's only when I made a transfer from this account to a 0% card that Lloyds seems to have lost interest in me as a customer."Īfter the intervention of The Observer, Lloyds reviewed Freeman's case again and restored his limit, saying: "As a missed payment was recorded on this account it triggered a review. "Lloyds has earned massive amounts of interest from me over the years. ![]() I may have missed payments in the past, but not in the last year or so. Having been a loyal customer of Lloyds since 1981, I was astonished that no account seemed to have been taken of that history. "In the case of your application, the current limit is the maximum which the bank is able to offer at present."įreeman says: "I felt betrayed. From time to time the bank will carry out a review of a customer's credit card limit which would include the usage of the card, the customer's financial circumstances and the level of credit which they have and is available to them. In a letter to Freeman last week, the Lloyds lending department said: "I have manually reassessed your application but I regret that I am unable to increase the credit limit. The bank could not find the cheque and, although Freeman cancelled it and sent another for £90 to the bank, it refused to restore his limit. ![]() But despite sending off a cheque as normal to clear his bill of £89.86 on 28 June, when he received his statement in July he was shocked to see he had been charged £12 for late payment and that his credit limit had been cut by £10,900.
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