Anyone else notified of credit limit decrease with no reason?

[johnbirt]

I have been notified of a significant decrease in my credit limit from June 2020. There cannot be any reason for this related to my credit history with PayPal or elsewhere as my credit score is circa 690 and always has been for as long as I can remember. I have no debts or current borrowing with PayPal or elsewhere. 

I can understand maybe this is as a result of current world issues but I would have thought that any credit would be best made available to those with a track record of paying it back and a exemplary credit record? 

The irony is that I would be very unlikely to want to use anything like the limit I would still have but nevertheless is annoying to find it summarily reduced without reason. I would certainly be pretty much welcome anywhere else for a similar credit limit other than PayPal it would seem.

Anyone else treated similarly?

[ronnyrob42]

Hi, I am another person that this has just happened to my limit has been 5000 and today received an email stating its being reduced to just 1000 with no explanation what so ever. I have never missed a payment and even pay anything off well before the 4 month time period, paypal has a lot of explaining to do, i will be making a complaint first thing tomorrow.

[Petesmiffy]

Virgin Money cut a lot of credit limits too. However when the BBC'S Money Programme got involved, they reinstated them. PayPal are obviously within their rights, but an explanation would have been polite.

[johnbirt]

Wow! That is a big hit! For no reason same as me.

Mine was also originally £5000 but only hacked down to £4400 which is rather better than your experience. I tried to do an oniine complaint but there were so many hoops to go through that phone is the only real chance of complaint. However good luck with that these days so haven't bothered so far.

Do let us know if you have any success. Good luck. I may have a go before the reduction date. 

Seems that they are ditching their most credit worthy clients for no reason. Surely good business sense would be to loan to people that are pretty much going to pay it back guaranteed. 

[ronnyrob42]

Hi, well got through on the phone to customer service not long ago and spoke to an agent and they have not been told of any reasons for the reductions apart from its just account limit review which I think we know is a lot of rubbish. Personally my belief is that with the corona virus they are cutting peoples credit so they cut their risk of losing the money in the unfortunate event that the person passes away while having spent the full amount of credit they gave them, say mine for instance if it happened to me the loss to them would have only been 1000 instead of 5000, i did how ever sort mine by telling them that since they decided on doing what they have done without even a consulting me to see if I agree or disagree to the changes then I would make the one change I have full power over and that was to cancel my paypal credit all together so I never have this problem with them again. Firstly tho I did say since there is no reason for reducing anything I request they stop and leave my credit as it was, they said they can't do anything as the decision has already been made. I hope that you can sort out your problem with them in a way you want. If I can help just drop me a message

[johnbirt]

Thanks for heads up. Unfortunately I expected the response you got and I would fully expect the same treatment as indeed it would appear everyone dealt with similarly. Job done as far as PayPal is concerned.

I was more annoyed at the way in which it was done. Even a "... in the current economic climate ... etc" would have been a simple courtesy of an excuse. 

I won't bother following up on it as it won't change. I will probably not bother with PayPal now as an Amazon card is good enough for my needs and people like Apple are offering 24 months interest free drip feed payment and they will not be alone with businesses trying to claw back lost revenue. PayPal may need in the near future to try harder with its client base. The bigger they are the harder the fall. I don't really need the full £5K credit I had or indeed any at all but I don't like curt discourtesy and I have other choices.

Keep safe all.

[KLB1231]

The same happened to me too. Similar situation in that my credit score is excellent and have had no defaults etc, I’m glad I searched on here and have seen it’s not just me as it was making me worry! I’ll be paying my account off and closing it as they’ve not even bothered to respond to my messages in the message centre.

[Norm77]

I also had a similar email, reduced rom £5k to £4.75k so not much of a decrease. There are a couple of threads on here one saying people were informed incorrectly and that they were escalating this to a separate team. The reason I say this is my “new limit’ was meant to start today. However after logging in I still have the old £5k limit on my account. So the question that needs asking is anyone else in they same boat?

Stay safe All.

[Ghaax]

It was the manner in which it was carried out that is poor. I work in financial services and we would get disciplined if I treated a customer like that.

To date I had only used limited credit and paid off in the interest free period. I think this has influenced the new limit. My credit was cut from £5000 to £1050 rather randomly if it is not based on previous use.

The problem for me now being the recommendation is that you only use 25% of your credit to ensure your credit rating is not affected. This means I should now limit my use to £260. This is of little use to me. Previous charges had been £760 and £720 so a limit of nearer £3000 would have been beneficial for me. Even £2000 would mean I could use it comfortably with 50% of the limit.

Would be interesting to see if those who received the smaller reduction have used a higher amount of their credit.

Bottom line for me is that I will not use this facility at all now. Laughingly they have started sending me begging e-mails trying to get me to use again. Not when I have 2 credit cards that regularly offer me interest free periods for purchases or transfers. Paypal have shot themselves in the foot.

[Steven145]

Same happened to me, except they waited until I paid it all off I got the Seiss grant, I paid it all off as I use the credit for my business so I could use it again and they instantly reduced it to 200 limit, very sneaky I think Anyway I got an American express nectar card so now I get an extra 1000 nectar points per month by using it instead of PayPal credit