Halifax credit card cancelled! Please read on

super_chef

My husband and I have had a halifax credit card for a few years now and have over the years used it a lot maxing it to the limit in other words been good customers to them so they could make lots of money from us ie interest payments!! Recently we have cleared all of the debt off and now just clear the monthly balance as we go along. My husband noticed that his credit card expires at the end of october and telephoned to ask if another card was in the post as he uses it for work. The operator then procedded to tell him that we wouldn't be receiving new cards as when they expired they are closing the account!!! Dumfounded my husband asked when they were planning to tell us and was rather sheepishly told "don't know!!" The reason given that our account was to be closed was that we had 4 late payments over the last ten months!! we are talking about 1-2 days late! and they are in there rights to close our account?? Is this because they can't make money out of us as we clear our balance every month... you bet it is! We are absolutely disgusted that they can treat there customers in that way, then to just leave us high and dry without informing us, anyone else had this happen to them?? Halifax should be ashamed!!

normanmark

Sounds like what they call a 'Reissue Decline'. They're fully entitled to close the account seeing as its their money you're borrowing.

I can see your point of being hacked off with the not informing you part. Look at it another way, have you been good customers? Their point of not issuing a new card and closing the account is because you've not paid on time. With all the financial issues going on at the minute banks and credit card companies are trying to review who they lend to (their money in all).

My advice, is just shrug it off & look for another credit card.

ldn-100

normanmark wrote: »

My advice, is just shrug it off & look for another credit card.

And consider holding more than one card. Issuers of credit can change terms and conditions and credit limits with very little notice at all. Cards can also fail at the point of purchase for a variety of reasons. It is best to have a back-up.

welshnoonoo

This is happening more and more at the moment. People are having their credit facilities withdrawn and I personally think that it is more a reflection of the current situations of the banks (too much cash out on loan and not enough in the bank) than it is on the customers.

The bottom line (in my little ole opinion) is that they have over lent and now they need to adjust the balance and this is one way they are doing it.

bert&ernie

It is indeed a re-issue decline. When a card is approaching its expiry date, the issuer will make a decision whether or not to re-issue the card. This decision will be based on many variables including late payments and whether or not the card is used to revolve a balance. The fact that you paid late a few times is indicative of higher credit risk - the fact that you pay in full indicates that you are not profitable to the issuer. All together, you are simply not the kind of customer they want and they would rather close your account than have to keep a line of credit open for you.

Why exactly should a bank feel ashamed simply because they decided not to provide you with a service that exposes them to risk whilst actually making a loss?

jonesMUFCforever

What makes the OP think they are good customers -? IMO 4 late payments in 10 months makes them a pain in the bum - again IMO Halifax are right to decline a reissue.

Morn

The OP has every right to feel aggrieved, but only that they did not tell them what was going to happen.

jonesMUFCforever

Morn wrote: »

The OP has every right to feel aggrieved, but only that they did not tell them what was going to happen.

If you tell them in advance what is going to happen do you know what will happen - they will spend spend spend until they reach their limit.

Scampy

I suppose the thing to learn is not to assume our cards are going to be automatically renewed in the current climate. I would think they don't check the dates of your payments or how late they are but just see four lates and that's enough for them to decide not to re-issue.

calibrax

bert&ernie wrote: »

the fact that you pay in full indicates that you are not profitable to the issuer

Not actually true... the only unprofitable people are those that do not use their cards much at all - if used regularly, then the issuer still profits from the transaction fees charged to the retailers.

Having said that, people who pay interest are of course MORE profitable to the banks than those who don't. So they could be trying to maximise profits by closing low margin accounts.

bert&ernie

calibrax wrote: »

Not actually true... the only unprofitable people are those that do not use their cards much at all - if used regularly, then the issuer still profits from the transaction fees charged to the retailers.

The issuer does indeed receive some income from the scheme by way of the interchange fee. However, this isn't as much as the retailer pays - the aquirer and the scheme both take a cut of this. This income shouldn't be seen as profit either - there are significant costs in running the account. There is the initial cost of acquisition (marketing, sales commission, branch networks, etc.), the cost of servicing the account (Back office, IT, telephony, print and mail, plastics etc.). Then there is the cost of funds - this may well be significantly above base rate at the moment and few banks will want to use precious funding on accounts that will be marginally profitable at best