Halifax Credit Card Revenge??

This may not be a popular response on this board, but there are consequences to all our actions. Nobody has a right to have money lent to them by banks and credit card companies. Banks lend money so that they can make a profit and they protect themselves from risk by doing credit checks and by having a set of terms and conditions that the borrower and the lender both sign up to.

Included in the Ts & Cs that we all agreed to were penalty charges if we pay late or exceed our credit limits. We entered into these contracts knowing these terms. If we didn't know these terms then we have ourselves to blame. In short, we only have ourselves to blame if we incur these charges.

Having said that, these charges are potentially unlawful due to unfair contract terms legislation so many people have started reclaiming them. That is fair enough - if they are unlawful then claim them back. However, there are a number of consequences to this.

Firstly, it means that people who have not managed their finances well (or who have had genuine difficulties making ends meet) see a "quick fix" to their problems and find someone else to blame for them. This prevents people from sitting back and thinking "OK, so I am running up these charges. I better try to get a better grip on my personal finances". In other words, a massive opportunity to educate people on personal finances has been missed.

For the second consequence I return to my original point that we don't have a right to borrow money from banks. Irrespective of whether or not the contract Ts & Cs were lawful, the banks thought they had a contract which defined how they would do business with us. If those Ts & Cs have been breeched and the banks can't get the penalty charges that they thought, then of course they are going to look again at whether the "deal" works for them or not. If someone suddenly claims back 100s or 1000s of pounds, then that customer immediately becomes less profitable so they are less likely to lend.

The other consequence is that the banks have their business models of how and where they make their money. Penalty charges clearly were a part of that. Now that this has largely been torn away from them, they will ensure that they make up the missing revenue from somewhere else. We have already witnessed the near disappearance of fee free 0% Balance Transfer offers and we may yet see the demise of free banking.

Everything has a consequence.

Andy - this post is not directed at you although it was prompted by it. I have been on the verge of posting this many times and just happened to do so this morning.

For the record, I do not work for a bank nor do any of my relations. I am not defending the banks here, merely pointing out that our actions have consequences and that there are no quick fixes to personal finance problems.

Clariman

Hey Clariman, what pretentious and pompous claptrap.It's hard to accept statements such as ' nobody has the right to have money lent to them from the banks...'.from someone who makes money using free money from those same banks. 'Potentially unlawful ' what does that mean, exactly ?
Penalty charges are not the issue here, and they have not been 'removed' as you suggest, they have been reduced to a legal limit.
The predatory nature of the banks (and by definition, stoozers) has been highlighted by this campaign, and a 'co-author of the official stoozing website' you will be aware of this.
I don't think people who incur bank charges need apologise to you or any other greedy stoozer, for throwing a spanner in the works.

Thanks for that Clariman, if I sounded personal it was because my response was to you and not the OP.
I thought this was a Money SAVING site.

Personally I think stoozing was a side effect of the amount of money credit card companies were able to make out of penalty fees and payment protection insurance and the high interest rates after 0% offers expired and the 'loyalty' of UK customers.

All of this was on the back of a very low level of bad debt though as lower interest rates made debt more affordable to service.

The 'new world' looks rather different though: People aren't paying back their unsecured debt as much, consumers are rebelling against penalty fees and PPI helped by sites like this and the popular press.

The response by the banks is of course to be more cautious about who they lend to and how much. Also to be less aggressive in their marketing of credit cards and switch their attention to other products - noticed how many fewer credit card applications are dropping through your letter box these days?

Stoozing wasn't the cause it was purely a consequence of what was an extremely profitable industry propped up by unlawful fees and unrealistic assumptions about customers willingness or ability to repay and the scramble for new business than ensued.

R.

peawack wrote: »

Hey Clariman, what pretentious and pompous claptrap.It's hard to accept statements such as ' nobody has the right to have money lent to them from the banks...'.from someone who makes money using free money from those same banks. 'Potentially unlawful ' what does that mean, exactly ? They have not been ruled unlawful
Penalty charges are not the issue here, and they have not been 'removed' as you suggest, they have been reduced to a legal limit incorrect as they have not been ruled illegal nor has a legal limit been set.
The predatory nature of the banks (and by definition, stoozers) has been highlighted by this campaign, and a 'co-author of the official stoozing website' you will be aware of this.what?
I don't think people who incur bank charges need apologise to you or any other greedy stoozer, for throwing a spanner in the works.what?

Your comments seem more of a personal attack than a response to Clariman's argument. If you have a counter argument by all means post it, if you just want to be rude and make ill informed remarks go somewhere else.