Covid-19 Impact: Banks started reducing Credit Card Limits

By | April 29, 2020

We’ve recently seen in detail about the impact of Covid19 on credit cards in long term. But now here’s something happening as an immediate response to Covid19.

Banks have started revising credit card limits of their customers to safeguard themselves from potential NPA’s arising out of salary cuts & job loss, as the Coronavirus situation is yet to get under control even after the extended lockdown.

Credit limits are being reduced by many credit card issuers due to Covid19 situation

What’s happening?

  • Axis Bank: According to a report in the Economic Times, credit card limits of nearly 200,000 customers of Axis Bank has been reduced with effect from April 15. Here at Cardexpert too we’ve seen a couple of readers report about the revision in credit card limit. Some of them have got hit in credit limit, as bad as 90%
  • Kotak Mahindra Bank: Kotak Mahindra Bank too has slashed credit card limits of its customers according to ET Now.
  • SBI Cards: There are also cases on internet reporting 60% reduction in credit limit on credit cards issued by SBICards.

That aside there are also reports saying that some issuers like Amex are holding requests for credit limit enhancements. This could be partly due to low workforce to handle the requests but it could also be a sign that issuers are getting sensitive about it.

What to do?

Nothing much, just keep a track on your credit card limit once in a while and always carry a backup card (just incase if you had to step out) as you never know when the banks would reduce your credit limit.

It would be smooth if issuers send an immediate notification via email/sms regarding the change.

Bottomline

Its no surprise to see banks reduce credit limits at situations like this but revising limits in the range of 90% is bit on higher side in my opinion. However, banks would be having enough big data AI to back their actions.

It has only begun now and that too in small numbers. If the lockdown keeps extending with more negative news, we could see major impact on credit limit on most cards, if not all.

While nothing could be done when banks decided to reduce the credit limit, I just wish they revert back to original limit once the situation gets under control.

So far the credit limits are intact on all of my cards. How about yours? Feel free to share your thoughts in the comments below.

Author: Siddharth

I love credit cards, enjoy travelling for free using reward points & airmiles. Obsessed with business class cabins, airport lounges and luxury hotels.

76 thoughts on “Covid-19 Impact: Banks started reducing Credit Card Limits

  1. Sharathkumar Anbu

    I have 13 credit cards. Credit limit is not impacted on any card so far. I am trying to get rid of cards which are not Life time free and not adding any value for the spends.

    Reply
    1. Praveen Katiyar

      Same here.. have a lot of cards.. the one I wish to close are where annual fee is high and I have/will not reach the spend target. Also travel cards (Axis Vistara in my case). Yet to use their prem. Eco voucher. Tried a lot in Jan in all sectors.. either no prem eco seats or no complimentary seats. Hence gave closing request even if it’s anniversary valid till Aug.

      Reply
  2. KARTIKAY GAUR

    Oddly, I got an offer to increase the credit limit on HDFC regalia first. However, the increase is only 10%.

    Reply
    1. dev

      When did you got this limit increase offer ? As HDFC has stopped increasing credit limit on cards due to covid 19.

      Reply
      1. Parth Patel

        No HDFC hasnt stopped increasing limit but might have reduced percentage increase. My lmit was increased last week from 5.5L to about 6.25L where as previously they used to increase by 20-25%. Though

        Reply
        1. Kailas B

          Parth Patel, I’ve Regalia first card with 1 lakh limit and I’m always pay Total bill amount every month ,but now bank reduce my limit , current limit is 60000 .Rs. only .

          Reply
  3. Ashish

    Sir,
    I want to apply New credit card of SBI
    After lockdown
    Does bank issue new credit card Or not after huge crisis

    Reply
    1. jambui

      I applied vistara card before lockdown. But got my card approval mail today.
      They sent card no in pdf while cvv n expiry can be generated via otp for online use.
      Card to be delivered after lockdown.
      So yes you can apply as all backend stuff is on.
      Atleast sales people.

      Though no support via call center at this time except for card blocking n txn dispute.

      Reply
      1. Sunil Patel

        Hi Jambui,
        Was your axis vistara card application a fresh one or you already had any other axis card

        Reply
        1. Jambui

          Its sbi vistara card. I already have simply save which i plan to close later as they were not allowing swapping of cards to vistara.

          All verification stuff was done before lockdown. They rejected card rejection before citing lack of docs which i forwarded to sales guy.

          Approval came on 1st may morning. Vistara freq flyer updated in app a day later and cvv n expiry successful after 2 days. Though they cite immediate generation while sending in approval sms.

          Added card details in Samsung pay and voila i can use it online n offline both even before receiving the card.

          Reply
  4. Amex Guy

    Interestingly Citi has been increasing credit limits for a lot of cardholders and SC has been extending loans up to 90% of available limit at rock bottom ROI.

    Yes Bank is another one reducing limits.

    Reply
    1. Gkcards

      Is it the thinking here, some like Citi think its helping customers in difficult times, whereas for some its safeguarding against potential NPAs

      Reply
      1. Satish Patil

        Citi has been very generous in increasing the credit limit recently. They have increased my credit limit by 100% in January. I have been using this card for more than 8 years and had not seen CL offers in the past.

        I did swipe my card in the U.S. multiple times in Dec and Jan for decent amounts. Bank has earned decent FX fees from me. Not sure if it has anything do with the CL increase.

        Reply
        1. Mayank

          Someone should show the same to standard chartered bank. Their civic-19 is going on for last 10 years. They are very poor in increasing the limit no matter how good are your spends.

          Reply
          1. Shubhendu

            My experience is a little different than this. My CL was increased by almost 50% after using the card for a little over a year.
            I am using SCB Ultimate

  5. SUNIL PATEL

    It seems IT sector employees are the ones who have their limit reduced, atleast in my circle. My experience is no change in credit limit across six cards and five banks viz.
    HDFC – 4.56L
    SBI – 4.66L
    ICICI – 2.50L
    RBL – 2.44L
    SCB – 1.59L
    CITI – .60L
    Almost all are offering PL, BT and EMI via promotion thru sms and emails. My personal goal is to cut the card where have paid annual fees during past year i.e. RBL card. I may close it in May,if no LTF offer is received. Have 4 CC application pending since MARCH due to lockdown all LTF with YES, INDUSIND, AXIS and IDFC First. Keeping my fingers crossed.

    Reply
    1. Gopal Gidwani

      Hi Sunil,
      You have mentioned that you have a LTF pending with IDFC First. Can you please let me know which credit card has IDFC First launched? I am not aware of any IDFC First credit cards?

      Reply
      1. Himanshu

        I guess it is OneCard that has not yet been available publically. It will be issued by IDFC First Bank once available.

        Reply
        1. Bharat Kohli

          I called IDFC bank and they are saying they are not in process of launching any credit card.

          Reply
      2. Sunil Patel

        Hi Gopal, Its called One Card which is marketed by FPL technologies and currently its invite only but soon full launch expected.

        Reply
        1. Gala

          What is IDFC First Bank OneCard credit card? does it come in premuim card category ?

          Reply
  6. abhay

    Limits of all four CC of mine is intact till now.
    @Siddharth : whats about expense based vouchers. they will provide later or we have to forget it.
    i got my 5k cost vouchers in jan & feb 2020 but from march to june (20k , 5k/month) is still in balance.

    Reply
    1. Akshat

      Hi Abhay
      Can you please elaborate which card offers spend based 5k voucher each month.
      Thanks

      Reply
  7. vvkkum

    That’s strange. ICICI doubled my credit limit couple of days back.

    Reply
  8. Saurabh

    Amex has not blocked my card but according to them has removed by charging privileges which will be resorted after I give them a call cause of some suspicious activity. This was like last week even after calling and confirming still not able to use card. In app supports still gives the same reason.

    Thinking of closing the card, has never used more than 3% of credit limit any given time.

    Any one facing same issue??

    Reply
    1. Saran

      Mine went under a credit review as well. Right around the end of April. All credit and charge cards were put on hold. I was explained and questioned on a few transactions I did (very small merchants – one was an interior designer, another was a hardware store). I think Amex was surprised that these merchants accepted their cards.
      After 7 days, the hold was released and I was told not to use my card at these merchants.

      Reply
  9. P K

    I have credit cards from 10 banks. SBI reduced the limit by 60%. Absurd having a credit history of 14 yrs and credit rating near to 800. Time to get rid of sbi card.

    Reply
  10. Arnab Chaudhuri

    My card limits are also not impacted
    ICICI EMERALDE-5L
    HDFC DINERS PRIVILEGE-4.86L
    INDUSIND LEGEND-1.5L
    RBL PLATINUM MAXIMA-1.88L
    KOTAK ROYAL SIGNATURE-0.90L
    SBI ELITE-DISCONTINUED

    Reply
    1. Sudheer

      Is it worth continue ICICI Emeralde card considering the current situation. I have applied this card 2 months back (Amex version) and paying monthly fee.

      Reply
      1. Arnab Chaudhuri

        If you are into spas/1.5% forex markup…flight/hotel cancellation insurance of 12k, BMS-750*4, then its ok. Else try to convert it to the annual paid variant or close it.

        Reply
    2. Shiyas

      My RBL card limit reduced to 32 percentage.. Not a single bounce since last 9 years on any credit card of mine like HDFC AXIS SBI

      What’s the hellllll

      Reply
  11. Gaurav Sahi

    My RBL credit card limit slashed from 1.4L to 10k.
    I have 11 cards and most of them have more than 5L limit, don’t know why RBL did that w/o any reason.

    Reply
    1. Gopal Gidwani

      Limit reduced from 1.4L to 10K. Lol …………. it would have made better sense for them to rather close the card instead of leaving a token limit and making a mockery of themselves

      Reply
  12. ANON

    Limits still intact on most cards
    15l on DCB
    10L on icici platinum LTF ( lol )
    9L on amazon pay
    7.5l on sbi / citi
    7L on kotak
    6L on RBL

    No limit reduction on any card. Surprisingly, SCB had given me a limit of only 70k when I got a card from them and recently increased it to 1.98L

    I think banks are reducing the limits only for customers who might have paid late sometime in the past ?

    Reply
    1. Naresh kumar

      I am waiting for scb to increase my limit. I opened the card in July 2019. How long had you have to wait before they enhanced your limit?

      Reply
      1. anon

        I got the card in 2018 Nov and the limit was enhanced around sep / oct 2019

        My spends on that card were exactly 60k required to waive off fee. Planning to close the card this year as it’s of no use at all.

        Reply
  13. Dr Anshul Gupta

    Amex and HDfC have reduced my limits (Amex from 2lac to 1.5 lac and HDFC from 2.6 lac to 1.6 lac, rest all my cards are intact with good limits. Amex restored old limit when I called them ….

    Reply
  14. Shivi

    Carbon limit quadrupled! ICICI seems to be going against the trend.
    Infinia limit not changed.

    Reply
    1. Anon

      You still have a working carbon ? Congrats !

      Mine’s number pad stopped working ~3years back. I asked for a replacement and they told me they can’t offer as it was a pilot project and stopped now.

      Reply
      1. Shivi

        Mine was issued recently after I shifted from Sapphiro. It was handed to me in Feb’20. Limit increased a few days ago.

        Reply
        1. Karan Bhandari

          Shivi can you help illustrate more how you got the card?
          Did you got an invite call or through retention?
          Is that a visa Infinite card?

          Reply
          1. Shivi

            @ Karan – It was through retention team. I wanted to surrender the “useless” sapphire so they offered me Emeralde which i declined and asked for Carbon. After a few days they called again and confirmed the card dispatch. Received it within a week.

            Yes, it’s on Visa Infinite platform.

        2. Anon

          Tha’t sooooo weird. I had got the carbon back in 2013 when it was launched and it stopped working around 2016/2017 sometime. Sent an email asking for a replacement card and they refused. Escalated to the nodal and was told it was a pilot and shutdown now. Soooooooo strange that they issued a carbon card in 2020. Gonna send another email to Icici. Let’s see

          Reply
  15. GAURAV PAHUJA

    Any prestige holder here who got the Ultima invite? I know three Prestige holders who got the invite last week apart from me. Ultima available at 2.15 L per year. Is Prestige going for another round of devaluation?

    Reply
    1. Shivi

      You might have come across Signature variant of the same.

      Reply
      1. Amex Guy

        Ultima Signature was replaced by Prestige. It doesn’t exist for like 5+ years now. It used to be 50K not 2.15L. Citi has been sending out Ultima Infinite invites to people lately. Keeping my fingers crossed.

        This shouldn’t indicate any devaluation of Prestige though.

        Reply
        1. SH

          Very interesting development. May be this was on the cards given that Prestige got a round of devaluation and now stands in line with other Citi cards. Pls share if you find out more details – benefits, fees etc.

          Reply
        2. GAURAV PAHUJA

          What about prestige moving to mastercard world elite? Is it better than Visa Infinite ? Prestige is technically free for me due to NRV. I missed the NRV this month due to decline in investments and was slapped a fee for the first time. I am considering the Ultima, but I need to talk to the team for getting the details, could not find them on the website. The brochure I got over email misses a lot of details and focuses more on the feel good factor. Most of my spends are travel based, and spends are between 3 – 5 cr for the annual year. Any other recommendations from Prestige ? I just have prestige and amex gold charge card.

          Reply
          1. SH

            Try for Infinia and Amex Plat Charge. The second one is easy to get, while HDFC Infinia make take some toil.

            BTW can you share the Ultima benefits. I understand that the fee is 1.8 lac + taxes.

        3. Shivi

          I was confused regarding the same development. Awaiting a review of Ultima Infinite & its features

          Reply
    2. Neo

      Is there anything more left in the Prestige to be devauled ?

      Reply
  16. Sandeep Kumar

    The decrease in credit limit could have been done for customers going for moratorium, having late payment history or no solid earning source in bank records. Its basically based on risk evaluation. Don’t take it personal if you are financially strong and still bank reduced the limit. This is done using AI which is not always correct. You can talk to bank and it can be revised case to case basis.

    Reply
  17. Aman Bindra

    Read a similar instance from a friend with a Kotak Card. My experience was different with HDFC. They were okay to double my dad’s regalia limit from 3L to 6L. Though i must say that offer was offered to us pre COVID. However the migration to new limit happened seamlessly.

    Reply
  18. Mahendra G

    My icici amazon pay limit is 3.5L. There is no change in limit. But only small value transactions which are less than 5k only allowed on my card.

    Reply
  19. Anon

    Tha’t sooooo weird. I had got the carbon back in 2013 when it was launched and it stopped working around 2016/2017 sometime. Sent an email asking for a replacement card and they refused. Escalated to the nodal and was told it was a pilot and shutdown now. Soooooooo strange that they issued a carbon card in 2020. Gonna send another email to Icici. Let’s see

    Reply
    1. Shivi

      I saw a Carbon in use at a cafe in Chandigarh in 2019 September- October also ~ asked the noobie using it and she casually commented it cost her 1K to get it. The keypad & its use is redundant by now as the OTPs are delivered to your mobile/email for authenticating the transaction.

      Reply
      1. Himanshu Kainth

        Shivi,

        What’s so special about icici carbon card apart from invite only and visa infinite programme.

        Reply
        1. Shivi

          Nothing special about it at all! It ain’t even by invitation now. I just got it for Visa Infinite platform and the numeric OTP keypad!

          Reply
  20. JOYCE

    I got a credit limit revised text from RBL Bank today. They have reduced the credit limit from 196000 to a paltry 10000. Will this decrease in credit limit negatively impact my credit score?

    Reply
    1. Sharathkumar Anbu

      If you are having high usage in credit cards, Let say you have 10 Lakh limit combined in all cards and you are using 6 Lakhs every month, utilization is 60%, now when they reduce the credit limit by 2 Lakhs let says, your total limit is 8 lakhs but spends is still at 6 lakhs per month. So utilization will shoot up to 75%

      You will see some minor points deduction based on increase in utilization.

      Reply
      1. Rajan kapoor

        ICICI Bank is also blocking credit card by sending messages your credit card Transaction withheld due to security reasons.

        Reply
    2. Shivi

      Nah. Though you should reconsider the advantage of continuing with that card now in the light of new CL and general downturn of RBL.

      Reply
  21. Sharathkumar Anbu

    I have closed my useless RBL credit card with 3.25 Lakh limit. Such a poor customer care and cashback / reward points will not be posted properly. Need to follow up multiple times to get the proper reward points. It’s better not to have any credit card from RBL. Very bad and pathetic bank.

    In the mean while, I got limit enhancement in ICICI Amazon pay card from 5 Lakhs to 7.35 Lakhs. I didn’t get any message or email, simply in the internet banking when I was checking manage my credit limit section, I see that maximum credit limit can be 7.35 Lakhs. I just changed the limit there and tada limit increased.

    Reply
    1. Sukant

      Hi, I also got the limit increased for my icici coral card from 6lakhs to7.2lakhs

      Reply
  22. Sree

    Has anyone else got CLE on their HDFC card during this time? They have a popup saying get CLE on your credit card, no T&C. But im not getting any though my last CLE was more than 6 months back. Misguiding i must say

    Reply
    1. Arnab Chaudhuri

      I tried that. even sent a mail to hdfc highlighting that ad as a screenshot. They said its only for pre-approved customers.

      Reply
  23. Gautam

    Dear All,

    In the wake of what’s happening, how do you plan to manage your fee-based cards like Amex and the like? Some of us have accumulated a lot of points. Would you consider paying fees to keep the points alive (as opposed to closing the account) knowing full well that travel-related points may not come handy for the foreseeable future?

    Reply
    1. Scaria

      @Gautam : I would rather close the card after encashing the points than paying high annual fee for travel cards such as amex

      Reply
  24. Rishabh

    Surprisingly Citibank is going reverse. Increased credit limit this week for me & other card in my family.
    My limit got increased almost to double while other card limit increased by 50%.

    Reply
  25. Aditya

    I got a message today that the limit on my RBL Credit card has been reduced from 1.10lakhs to 30k . Will this be reversed to the original limit once the situtaion betters ??

    Reply
  26. Khwaja Siddique

    ICICI rejected transaction at POS terminal. The amount is not even 5% of my credit limit.

    Dear Customer, transaction of INR 15,300.00 on ICICI Bank Credit Card XX000X is withheld due to security reasons. To complete your trxn, pls call Customer Care.

    Customer care not reachable. Had to use SBI credit card.

    Reply

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