What do they want??

Ziggi_2

Hi all

I wanted to ask your opinions on a somewhat strange problem I have with a credit card company.

I've been with the credit company for over 5 years and have maintained my minimum payments just fine.

Recently, I have received a call from the collections department at the card company in the middle of the day. They told me that I have been withdrawing lots of cash and they wanted to know what it was for. I couldn't give in-depth answers since I was at work, but I explained that I used the cash to buy some collectibles and furniture from someone who doesn't have the facility to charge it on my card.

They were insisting that I go through each transaction separately. I could'nt do that because I was at work. They told me that my card would be frozen until I call them and explain in detail what I used the card for.

I got the impression that they wanted to find some reasons to close my account. I say this especially because a month earlier I received an e-mail to say that my interest rate would go up, unless I took the option of closing my account and paying it off slowly at the previous interest rate.

I don't understand! I make all my payments on time and have always kept my balance within the limit.

Any help and suggestion is very welcome

Thanks in advance

Ziggi

Robert_Sterling

Insufficient information supplied ... so no comment.

CLAPTON

CC companies are increasingly treating cash withdrawals as a sign of financial distress (i.e. they think you are going to default soon)

_Andy_

Call them and speak to them

Ziggi_2

Thanks for the responses sofar guys.

I am due to call them today after work. Before that I thought I could ask whether anybody else had received such a call from their credit card company, and what the outcome was.

Robert Sterling, please let me know what information you need and I can respond with the relevant information.

Thanks Clapton for the info.

Moggles_2

May I ask which credit card is involved?

Are you able to clear the balance before the payment due date?

I ask because using a credit card to withdraw cash is a bad idea. Not only are you charged a high rate of interest plus handling fees, the payments you make afterwards are allocated to other transactions first, leaving cash withdrawals trapped on the card attracting interest.
Not recommended, unless you have money to burn :eek:

Aware of this, your credit card provider will assume you're desperate for money, as Clapton says.

If you are able to settle the bill in full, I would stress that when you phone.

Very best
M

Ziggi_2

Thanks Moggles

The card company is Egg. I realise the very idea of withdrawing cash from a credit card is bad, but I didn't know the repayments are allocated to other transaction first.

This is a £10k debt and I just don't have the money to make the payment in full. I can afford to make the minimum payment and have always maintained the minimum amount.

nickmack

Ziggi wrote: »

Any help and suggestion is very welcome

Sounds like they are flagging suspicious patterns in cash withdrawls and want to ensure it's you getting the money.

For the reasons above, withdrawing cash has always been a bad idea. Even more so now, as your credit report details the amount of cash you've withdrawn each month from a credit card for some lenders.

This will set alarm bells ringing for anyone doing a search that you could be considered in financial difficulty.

Moggles_2

Do you have other credit cards besides the Egg card?

Your best bet would be to apply for a 0% balance transfer card and shift the entire Egg balance to the new card or ring your existing card provider(s) and see what BT rates are on offer

Meanwhile, I would stop spending on the Egg card, if you haven't already. I'd concentrate on paying off as much of the balance as possible. Clearing this debt ASAP will reduce the interest you pay and you'll be building a better credit history in the process.

ylesia

I think it's rather responsible of them to phone you but a bit confused why it is the collections department that is phoning?! I do know someone that had a phone call like this recently (don't know which card) - they suspected she was withdrawing money from one credit card to pay another and wanted to "talk" about it. This is exactly what she was doing and I think she will be going onto a DMP soon to get this under control.

Agree with everyone else about though, you really need to get the interest rate down on your card otherwise you will be paying the minimum payment for the rest of your life. For future reference if you really need to be able to withdraw cash on your card then I think Nationwide allocate payments to the highest APR first on their cards but this may have changed.

JMW77

I would cancel the card and get another one ,sure its fine to check that you have been using the card and it has not been stolen or cloned but what business is it of thiers what you spend it on!
As long as the card holder is responsible whats the problem!

Sorry did not read you have a balance of £10,000 ,you seriously should get paying serious amounts of that and withdrawing cash is really a bad idea don't they really sting you on the APR for such withdrawals.They must be seeing you as a risk still its your debt and its still not their business what you spend it or don't spend it on,if you are within your agreement.
You obviously are not too worried to be buying collectables etc,and they are getting their money however slowly plus interest!