A Toronto man says his credit card limit was reduced without warning as a result of COVID-19.
John Guevarra has a large family and says he likes having a large credit limit balance in an emergency.
Guevarra has a Walmart Mastercard with a credit balance limit of $ 7,000, but said it was reduced to $ 1,100 without notice.
“I have been with them for six years. I did not do anything wrong. I pay my bills on time and the credit bureau says I’m in good standing, “said Guevarra.
“They told me that the limits on Covid-19 credit cards were reduced. “
Milton’s Syed Hussain has had a similar experience.
Her credit limit was also significantly reduced and she was told that COVID-19 was the reason.
Hussain has a PC Financial Mastercard with a limit of $ 17,500. He says his limit has just been reduced to $ 1,700, despite a zero balance and a good credit rating.
“My income was good, my credit was fantastic. I made payments on time and never missed any payments, “said Hussain.
CTV News Toronto has contacted Duo Bank which issues Walmart credit cards. A spokesperson told us that changing credit card limits is “industry standard practice” and that these limits may change over time.
Duo Bank then restored Guevarra’s credit limit to $ 7,000.
CTV News Toronto also contacted PC Financial and a spokesperson said, “Like all financial institutions, we use a variety of factors to determine credit limits.”
Hussain’s limit has been raised to $ 7,000 and he can have it revised in 3 months to see if he can raise it again, which suited him.
Credit card companies may seek to avoid future losses by reducing credit limits, and lines of credit may be next. There is concern that consumers with high credit limits may make many purchases, start missing payments, and be unable to repay.
Neither Walmart nor PC mentioned COVID-19 as the reason for the credit limit changes in their statements to CTV News Toronto.