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Pushing up repayments on credit card?

Discussion in 'Personal' started by oldsomeman, Aug 4, 2020.

  1. oldsomeman

    oldsomeman Star commenter

    Just a quick question
    My credit card hold wants to push my repayments up by £70 a month. It seems I am not paying off enough although I try to pay more than the minimum as and when I have it.
    It seems the FDA? want people to pay off their debt quicker.
    It this right they can do so. The FDA I mean
    I really do not know where I can find another £70 a month out of nowhere!
    Thanks but please note I am NOT here to be interrogated by folks.
     
  2. Rott Weiler

    Rott Weiler Star commenter Forum guide

    FCA I think, not FDA. Financial Conduct Authority. Financial services sector regulator. For quite a while they've been expressing concern about people who only pay off the monthly minimum on credit cards because they think it is creating problems with people who cannot pay off their debts, and that has implications for the lenders and the financial stability of the whole sector.

    FCA do not tell individual lenders what minimum repayments should be made. They don't micro-manage lenders at that level of detail. But lenders respond to these strategic-level pressures from FCA by changing their lending practices.

    Whether your lender can change its minimum repayments I can't say. In general though lenders normally give themselves the power to make changes like that, subject to appropriate notice etc.
     
    oldsomeman likes this.
  3. oldsomeman

    oldsomeman Star commenter

    Thanks
    They have a helpline I shall ring tomorrow but it was the amount that caught me. It basically means they have altered my interest rate although I have not defaulted for over a year or more and paid i lump sumps when I have managed to save towards the outstanding amount.
    Would not think lots of folks are unemployed/not earning, would we?
     
    agathamorse likes this.
  4. modelmaker

    modelmaker Lead commenter

    It's impossible to get blood out of a stone. If you don't have the income to make increased repayments, you won't be able to make them. Simple as that. There may have been something in the small print when you signed up that said they can change the minimum payment any time they like, but the bottom line is that it isn't straight-forward for them to enforce it.

    If you refused to pay it because it's beyond your means, and they refused to accept that, they would probably cancel the card and have to get a court order to recover the debt. The court would ask what you can afford and make an order based on that. The bank knows this and is more than likely to agree an affordable repayment schedule with you.

    You need to talk to them.
     
    agathamorse and littlejackhorner like this.
  5. cissy3

    cissy3 Star commenter

    agathamorse and knitone like this.
  6. catmother

    catmother Star commenter

    In that case,I probably should not mention you selling your London house?
     
    EmanuelShadrack and Dunteachin like this.
  7. colpee

    colpee Star commenter

    As long as you are paying enough to avoid excess charges and paying something off, I doubt they can make you pay more. It is likely a target driven ploy to increase cash-flow. Just say no!
     
  8. Jamvic

    Jamvic Star commenter

    It sounds as though you have fallen under the newish ‘persistent debt’ definition. If this is the case the credit provider is now under a legal obligation to show they have taken actions to ‘help’ you get out of this category.

    ‘Persistent debt is when a person has paid more in interest, fees and charges, than they have towards paying off their credit card, store card, or catalogue account for more than 18 months’.

    You need to contact them if the new level of monthly payment is not realistic and come to some arrangement.

    However, under the new rules, they are completely within their rights to request an increased amount be paid each month.

    Ultimately if you can’t show them that you can get out of the PD category within a certain timescale, that they will have set, then they can suspend the use of your credit card while you pay it off.

    In this situation I would be looking to quickly transfer the whole balance to another credit card that had the longest 0% interest rate offer out there. Some are still available at 0% for 24-36 months but these offers are vanishing quickly in the current economic circumstances. Then I would try adjusting my budgeting to attempt to pay as much of the balance off as I could over that period of time.
     
  9. oldsomeman

    oldsomeman Star commenter

    No, it would not. There are times when some folks do not know when to stop baiting.
     
  10. cissy3

    cissy3 Star commenter

    Jamvic has outlined some of the points made in the links I posted.

    ''it may be that paying more on your card is completely the wrong approach for your situation. Here's Martin's view on persistent debt letters, then the guide runs you through the options to sort your debt..''

    Here's the link again. It's the Martin Lewis MoneySaving Expert bloke. Very reliable.

    https://www.moneysavingexpert.com/credit-cards/persistent-debt-help/



    I wasn't baiting in any way, I hope?
     
  11. vannie

    vannie Star commenter

    Can you not just do a balance transfer - transfer the debt to an interest free credit card and set a more manageable payment which they will accept as it will be interest free and therefore reducing the debt more quickly? Some credit card companies are offering up to 23 months interest free at the moment.
     
  12. vannie

    vannie Star commenter

    Aaah. I see @Jamvic has already suggested this. Sorry. Must get my eyes and concentration span tested.
     
    agathamorse, Jamvic and knitone like this.
  13. modelmaker

    modelmaker Lead commenter

    Good article.
     
    agathamorse, Jamvic and cissy3 like this.
  14. foxtail3

    foxtail3 Star commenter

    An interest free transfer is a good idea because you will be able to reduce the debt, rather than paying the interest. At the end of the term, if it’s not paid off, you can transfer again.
     
    agathamorse and Jamvic like this.
  15. oldsomeman

    oldsomeman Star commenter

    Thank you all for your considerations. Tomorrow I will set out to resolve the issues. I am not sure I can easily get a new free interest card but I am looking, Thank you all once again for your care x
     
    Jamvic likes this.
  16. racroesus

    racroesus Star commenter

    If you have defaulted in the past couple of years you might not get another card. There might be an option to keep the same repayment but never use the card again. Check your credit score before applying for another card.
     
    Jamvic likes this.
  17. oldsomeman

    oldsomeman Star commenter

    Thanks, I have considered it. The problem is one cannot do without, unless you wish to lower your credit score. The credit card, strangely.is a form of evidence you are creditworthy.
     
    agathamorse, racroesus and Jamvic like this.
  18. cheesypop

    cheesypop Senior commenter

    It is, but then problems meeting minimum payments undoes that good.
    You could have a credit card but not use it for everything. A few purchases a month, with as much paid off as possible each month (all, ideally) is the best way to prove credit status.
    Are you buying things you can’t afford, or is this historic debt that you are struggling to pay off? If the latter, definitely try to move the balance to a 0% balance transfer then focus on paying it off and don’t use that card for anything else. If the former, then it’s time to look at outgoings because the problem will only increase.
     
    needabreak, agathamorse and Jamvic like this.
  19. mothorchid

    mothorchid Star commenter

    @vannie perhaps a quick drive over to Barnard Castle would help?
    @oldsomeman What a stressful thing debt can be. If at all possible, I think a transfer to a 0 percent balance is the way forward. If not, maybe your credit card company will agree to a lesser amount per month, although increased slightly. It might also be possible to look at some other sort of loan like a bank overdraft, as this would be on a lower rate of interest. But NEVER a payday loan!
    I hope you can sort something.
     
    agathamorse, vannie and Jamvic like this.
  20. Jamvic

    Jamvic Star commenter

    :D Very quick. Very funny.
     
    vannie likes this.

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