Credit Limit Increase Declined - My Rights

Hello All,

I applied for Cr limit increase online from 5K to just 7K (Coles MC) and it was declined within a fraction of second. Here is the screen. Per the screen shot "If you'd like to discuss the outcome of your credit limit increase request, please contact Customer Solutions", I contacted them and the supervisor denied bluntly to discuss why the Cr limit request was denied stating they cannot disclose their lending criteria.

I have immaculate credit history (just obtained a copy last week), have always paid all the Credit cards, bills, mortgage etc in time and my income has increased almost 30% in last 2 years.

BTW : Having Coles MC since 2011 and applied for cr increase back in 2012 where it was increased to 5K.

My question is what are my rights in order to know why this limit increase was declined. Per supervisor @ Coles MC it is totally private and there is no way they can disclose it to me.

Your thoughts please.

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Coles Financial Services
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Comments

  • +15

    They don't have to give you the specifics on why your limit increase was declined, but you can try to speak to someone from the lending department to plead your case and see whether they'll overturn it.

    The fact that you always pay your credit card on time may actually be one of the reasons they take into account. Increasing your credit limit will add some risk from their perspective but if you always pay before the interest period kicks in then they'd be forecasting to get no return for that risk.

    It's not as simple as "good credit record? Cool, increase away!" - it's a lot more nuanced and may have to do with your good behaviours as much as your bad, or it could have nothing to do with you and simply be the current appetite of the company to lend out higher credit limits in the current climate.

    Best bet is to try to talk to the lending department to plead your case, but they don't have to (and won't) disclose their lending criteria that knocked you back. They don't want their criteria to be gamed so it's best kept secret.

    • +1

      They never lend you money when you need it. It's best to apply when they send you forms for credit limit increase. I use my credit card as debit card , top it with your money and take frequent flyer points.

    • I remember the time when I lost the job for 11 months and maxed out my AMEX, I used to pay the minimum payment on time and got an offer in the mail to increase the limit from 10k to 14k. Now I have paid everything off and have reduced the limit to 2k, now no more offers for more than a year.

      Like others said it depends what they can squeeze out of you as well.

  • +1

    Coles are not as generous as the CBA when it comes to credit limits.

  • Mate if you've got other credit cards and a mortgage, there is a limit to what everyone can borrow. Do you know what yours is?

  • +1

    switch to citibank signature, you'll get a pretty decent limit

    gemoney has been known to offer lower limits

    • +1

      Just don't try and get anything resolved with them. They are monkeys with typewriters on the other end and take forever to get anything done. I don't have anything with GE Money, but two friends did and they both had terrible experiences. I'm with suncorp clear options platinum (citibank) and use it as a debit card, totally works for me.

  • +4

    I have immaculate credit history

    Had. I suspect it now has a note that you have been refused a credit increase.

    • +1

      It'll most likely have a note indicating a credit enquiry, but most likely not stating whether the credit application was approved or rejected. Even without that, though, more credit enquiries is considered a bad sign.

      • +1

        If lenders see many inquiries at one time on a credit file it's called something like "fishing for credit" (not the actual term).

        I can't see the one self inquiry being an issue, but the OP may have made more credit inquiries than he is telling us about (each company you inquire through
        will add an inquiry).

        Best bet call them and tell them you want to close the account and move to a competitor as the limit isn't enough for your needs, ask them what other customers
        in your situation do when they need to increase their limit (get them to give you the answer as opposed to talking about rights, asking for their lending criteria etc).

        Also it might have nothing to do with OP, might just be they don't want to extend extra credit to this type of card holder.

  • id say you have to many expenses for the minimum repayment required with the credit limit you want.

  • +16

    Is not a 'right' to have a credit card, more of a privilege. However it is the banks right to decline the request.

    • +5

      And if you aren't happy with the service offered, take your business elsewhere.

  • +5

    HSBC once refused a credit limit increase from $2k to $5k (credit card was empty, I just needed to buy something big and put it on interest free). We're talking income of $100k + wife of $75k… and only a $320k mortgage and 1 car loan for $20k.

    Because I had been carefully paying off that card with no interest, they refused. Wife went in, and got the $5k card - on the EXACT same expense and liability listing but less income as she was a new customer!

    Same deal when we needed her GE GEM extended… because we'd missed one payment and there was a slight charge ($20 or something) they were happy to extend over the phone by another $2k. Crazy!

    • Gender and age are seen a risk factor. I've seen something similar happen, I got offered 3k limit she got offered 18k! Same product, applied at the same time, I had 30 per cent higher income as well, we both have the exact same credit products. Go figure.

  • +3

    You have the right to remain silent

    • Anything that you say or do may be used as evidence in a court of law.

      Right?

  • Anything they say could be a land mine. Best if they say nothing at all.

    Your rights? seriously, Move along.

  • +4

    You have the right to remain….. upset!

  • +1

    Your rights?

    This is indeed a grave injustice carried out against you. I'd recommend the ACCC, any sort of ombudsmen that will listen to you, probably Fair Work Australia too… THEN see if Today Tonight will do a special on banks not giving out credit and then not discussing it with you (THE CHEEK OF THEM!!).

    Or, you have the right to suck it up and move on… Your call.

    • +5

      Why be such a dick? The OP wasn't complaining just asking for opinions.

      • +28

        people who complain about "rights" in this instance are delusional and get all the ridicule they deserve

        • +2

          This. Exactly this.

        • +9

          I don't see any complaints about rights just a question asking whether they have any. They don't - no need to be an arse.

        • @tonyjzx: Perhaps it does. Don't waste any more time replying to me, use that time to polish your halo instead.

    • -3

      you forgot the bikies option!

  • +16

    I don't know about your right to know why your limit increased request was denied however I wouldn't want to give my business to such a crummy organisation. My thoughts; get another credit card and then cancel your current one and then tell them, if they ask why, you cannot disclose your borrowing criteria.

  • This seems weird. Banks are throwing money at you, these days. I personally don't like having high credit limits on my credit card. Just want enough to be able to take a holiday, or buy that 4K TV. Anything more, opens yourself to risk of fraud.

    • +1

      this ^^^

      its a trap, what can you do with $7k you cant do with $5k?

      unless its a business credit card I cant see a normal household needing that much but hey, its your life

      • totally understand your reasoning … however more often than not people aren't able to clear off the entire balance (e.g. paying the minimum monthly whilst continuing to spend on CC) which means that extra 2K could mean extra leeway before the CC is over the limit.

  • It can be very arbitrary.
    We had a credit limit of $20k on a card linked to our mortgage (paid off every month of course).
    We looked into refinancing with a competing bank with a similar "bundle". Their offer was a $4k limit.
    We easily cover repayments with long stable employment history.
    Another lender got us what we needed, much to the dismay of the original mortgage agent.

  • +1

    Consider it an opportunity to get 50000 Frequent Flyer points with annual fee waived in first year:

    https://www.ozbargain.com.au/node/193092

    Eligibility for the Platinum version is quite reasonable, eg. minimum income of $50K.

  • We should all boycott Coles & Woolies, they are scums !

  • +3

    Interesting note, I have a card which I have diligently paid off each month… until 6 months ago. I don't have a lot owing but the past 6 months I have only been paying the minimum repayment (and interest that goes along with that). Low and behold, I got a letter in the mail inviting me to increase my credit limit. I don't think it was a coincidence. I think they finally started making money out of me through interest and saw an opportunity.

    Maybe you can do a little experiment and see if it works?

  • Coles credit cards are now wholly owned by Coles as they bought out GE and obtained a banking licence so they can move into deposits and lending in the future. Maybe they are just being too careful now they risk sits solely with Coles.

    • Credit facility provided by Wesfarmers Finance Pty Ltd (ABN 58 601 282 455) (“Wesfarmers Finance”). Australian Credit Licence number 470916. GE Capital Finance JV Holdco Pty Ltd is the authorised Credit Representative of the credit provider, Wesfarmers Finance.

  • I would be checking my credit history file to see if anything untoward is to be found there. Very unlike Credit Card firms to deny a small increase in a limit. Do not reapply anywhere until you check your file as this just causes more issues.

  • You have the right to go get another card from another lender.

    • Right.

      I mean, correct.

  • Some banks like citibank will autodecline an application or limit increase request if you have any credit enquiries within the past 6 months. Its not something that the banks will disclose if you try to ask, but you can estimate from other peoples experiences

    • Citibank said 9 months when I called re increase

  • Hey OP

    Lenders use in-house rulesets (e.g. age, existing loans, assets, or whatever info they've garnered about you) combined with an external credit check facility (e.g. Veda) to determine your eligibility for a loan.

    You might want to check your score here for some hint, someone posted this a few weeks back.
    https://www.getcreditscore.com.au/

    Lenders have no obligation to provide you with their criteria, and it would be dense and complex in any case. As an earlier poster suggested, try talking to their credit department or just getting another card.

  • Without telling us your financial situation income/expenses there is very little point asking us if you are entitled to a higher cc limit.

    • +1

      Isn't the OP a distant relative of James Packer's?

  • I guess it is somehow that ridiculous. After 3 years proving myself to CBA, I got offer to increase my credit limit from 14 to 20k, even though I was a full time student at the time without a part time job. I lowered the limit to 10k as I was afraid I would get myself into the whole Apple thing again. last year before going oversea I applied to increase it to 15k and got declined in a blink. I cant really understand how the system rejected my application while I was having a full time income and still spending the same as always. currently looking over the citibank deal to get rid of CBA.

  • I know someone who worked at a bank who dealt with things like this, and he said that in a very basic manner auto declines by the system are usually because the algorithm is detecting it based on % of income. Any time where your credit limit is over 10% of your income, you might be declined. So if you were on 50k, it was fine until you wanted a 14% increase over the original 5k limit.

    Of course, it is dependent on the bank and the algorithm they use, and there is a lot of other factors at play (like being responsible may be working against you) and it's all v complex. All banks are different and have different lending criteria. It also depends on the card. If it's the Coles no fee MC, they are probably more reluctant to up it than some of the others with fees. (Although that doesn't make much sense, they'd make more money if you were given incentives to shop more).

    Or it could be completely arbitrary. Not even he was privy to that kind of knowledge. He just said a lot of times the auto declines are based on income.

  • All the comments are very interesting about paying on time and that is why they declined. I've never been late on my payments (direct debit what is owed that month). I've got 25k w/ Westpac 2.5k with GE. Just got a stupidly large loan for a house and then last week applied for another cc with citi for their 0% balance transfer and they gave me double Westpac. So I have no idea on how this works…i think it's a mystery.

  • I doubt paying your statement on time decreases your chances of an increase. I am an ex bank employee and haven't heard of that but I didn't work with credit cards specifically so it could be true (or not).

    If anything you can threaten them with the financial ombudsman if you legitimately feel like it's unfair. The banks get charged a mediation fee of $1500(ish) so they usually just play ball with small increases. Maybe they'll increase your limit by 1k or something.

    • -1

      If anything you can threaten them with the financial ombudsman

      Types of cases we can't consider

      an FSP’s assessment of the credit risk posed by a borrower (with exceptions in cases of maladministration or financial hardship)

      • -1

        Just complain about not meeting standard of good practice. Bank will still get hit with a fee regardless of whose favour the ombudsman decision goes.

        • -1

          Last time I went to my bank, the lady didn't ask me how my day was, not good standard practice! Perhaps I should take your advice and complain about them tot he ombudsman.

          cough

        • @Ughhh:
          you're welcome mate

        • @Ughhh: didn't Kramer make $20 when the bank didn't greet him to his expectation?

  • +17

    One approach I'd try:
    - Hello Coles, I'd like to cancel my credit card please.
    Coles: Oh, why do you want to cancel?
    - The limit is too low…..

    Usually fixes things :)

    • +2

      +1 for this approach
      You've tried to be nice to them, but they slap you in the face.
      Now show them who's the boss…

    • +1

      This is also a good way of never paying annual fees on a credit card and getting credits or gift vouchers.
      As to the lending criteria my personal banker told me the other day that the bank had issued a memo that they had to decrease their investment lending by half and so the interest rates are not going to be as attractive in the near future. I think they are going to be more careful in there lending.

      • +3

        I attempt to cancel all of my services every year, even if I'm in contract. Otherwise you're paying the lazy tax.

        Phone, always get extra data/calls or new cust discounts.
        Foxtel will usually match any new customer deal straight away. Then you work them a little harder (they seem to be able to move a lot)
        Elec, same, new cust discounts
        Insurance, same. But lately they've been harder than usual, can't just knock a few $$ off anymore. Helps to have a competitior quote.

        Note that all of this only works if you call to cancel, go right through to the end, but obviously don't actually cancel if you don't want to. Don't call and ask them for a deal, you need to be speaking to the cancellation department.

        Except for water. Govt knows you've got no options there…

    • +1

      +2 for this.

      This is what I'd do. Call them back be polite. Call up say

      "Hi I want to cancel my Coles Master Card"

      Coles - "Why"

      You - "Well I tried to increase my credit limit on your website, I was declined so I called customer service. They wouldn't give me a reason."

      Unless they give you a decent reason why do as @dazweeja said and claim this deal
      https://www.ozbargain.com.au/node/193092

  • change cards, they know you wont

  • +4

    Some people just can't accept hearing the word "no".

  • Wondering if the OP is Greek by any chance :)

  • +2

    you have a right to shop elsewhere. cancel the card , go with another bank.

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