BEN WILKINSON: Barclaycard’s sweeping credit cuts may cost it dearly

Pushed to the limit: Barclaycard’s sweeping credit cuts may cost it dearly, says BEN WILKINSON

Surely credit card firms want us to spend? You’d think they would be licking their lips in anticipation after economists predicted a multi-billion-pound spending spree when the country fully emerges from lockdown.

This is just one of the reasons why Barclaycard’s decision to slash spending limits for more than 100,000 customers is so bewildering.

It says it has reduced limits owing to the economic impact of the pandemic, and that this is part of being a responsible lender. 

Cuts: Barclaycard says it has reduced limits due to the economic impact of the pandemic, and says it is all to do with its role as a responsible lender

However, we have heard from customers who have not lost their jobs, who have kept on using their cards and who have even had pay rises — and yet their credit limits have still been slashed.

We’ve spoken to spenders who have been with Barclaycard for decades, but now, for some reason unknown to them, their credit limit has been reduced to £250. 

It simply doesn’t add up. This heavy-handed, and seemingly arbitrary, attack on spending is already causing Barclaycard problems. 

Its phone lines are overrun, while some long-term customers are applying for a new card with a different organisation willing to offer more credit.

And this comes just months after Barclaycard apologised for setting some credit card limits too high. It insists the two events are not related, but can it really be a coincidence?

The scale and severity of the cuts does suggest that the provider has perhaps awarded customers with extremely generous spending powers in the past. 

After all, if the credit limits were all appropriate, why have so many been so drastically changed? Aren’t credit card limits supposed to take into account the possibility of recession or job loss?

But it is not only about spending power. Credit cards afford us vital consumer protections when things go wrong. Without one, spenders can be vulnerable.

This saga also raises questions about how transparent providers are when it comes to the reasons behind our spending limits.

Customers say they have not been given a good reason for the credit cuts — but Barclaycard should be justifying this draconian move to every single card-holder. 

No one wants to see a person tempted to spend more than they can afford, but we also don’t want sensible spenders being punished for no good reason.

Barclaycard’s sweeping credit cuts have frustrated and angered many who were just getting ready to spend again. It may have cost the company dearly.

Pensions buzz

One of the biggest challenges for the pensions industry has been getting people thinking about their retirement when it is still decades away.

For most young adults, scraping together a house deposit is far more pressing. 

But with tax relief and the power of compound interest, pensions offer fantastic value, and it’s a crying shame that most of us aren’t utilising them from the day we start working.

The rapid rise of PensionBee, which will float on the stock market next week, is testament to the demand for a simple fix to the pensions problem. 

This handy app has empowered people to think about their retirement and start saving smart.

The Government’s plan for a Pensions Dashboard (showing all your pensions under one roof) was supposed to do just this, but has been dogged by delays.

PensionBee has to be applauded for engaging so many people with their savings. It’s something the industry and Government has failed to do for so long.

Fare flex?

As many commuters could be returning to the office this summer, all eyes are on proposals for flexible seasonal train tickets.

Many of us have seen our savings soar without the extortionate cost of rail travel in our monthly budgets.

But without reasonably priced train tickets, commuters will be reluctant to step out of the home office and help bring our economy back to life.