Close Credit Card, Setup Payment Plan Advice.

mart3ndo

Hi,

I am looking to close my credit card, as I am not using it and i'm just getting charges put on it

I found an article on MSE which told me it might actually look better on my credit profile because it would show I have more credit available.

It currently has £400-odd outstanding on it, and I cannot afford to pay it all back in one go.

I am wanting to close the credit card and setup a payment plan. I am really just wanting to know what the best way to do this would be. Should I go into my branch, write them a letter or phone them?

I'm thinking that writing them a letter is probably the best bet, as then I've got a record of what I actually want, does anyone have any advice of anything specific I should say, as we all know how understanding and trustworthy banks are.

rsykes2000

You say you are getting charges put on the account - are these due to non-payment ? If this is the case, your 'credit profile' will be seriously damaged already and attempting to close the account will have no positive effect at all.
I would suggest speaking to one of the free debt advice charities eg http://www.cccs.co.uk/ - they know about debt management plans and can assist properly.

Moggles_2

I am looking to close my credit card, as I am not using it ... I found an article on MSE which told me it might actually look better on my credit profile because it would show I have more credit available.

Closing the account would reduce your available credit. This would only "look better" if you had too much available credit in the first place.

TBH, it's in your interest to work out a payment schedule in order to pay it off as quickly as possible, rather than rely on the credit card company to impose a payment schedule.

What charges are you paying at the mo?

mart3ndo

Moggles wrote: »

Closing the account would reduce your available credit. This would only "look better" if you had too much available credit in the first place.

TBH, it's in your interest to work out a payment schedule in order to pay it off as quickly as possible, rather than rely on the credit card company to impose a payment schedule.

What charges are you paying at the mo?

When I got the credit card, i was working full time, now however I am working part-time.

Recently i've been unable to pay even the minimum payment on the credit card, which means both late fees and overuse fees. That is why i'm wanting to stop it before those fee's mean I owe even more.

CannyJock

You say a balance of £ 400 odd. If it was £ 450 and the minimum repayment was 2.5% that would only be £ 11.25 (unless you've got a minimum repayment amount like £25 with MBNA cards). A late payment charge is probably £ 12?

For such relatively small sums, I'd be tempted to tough it out rather than make any long-lasting impact on your credit report for what is hopefully a temporary change of circumstance. Might mean becoming a hermit for a few months but worth it in the long term IMHO.

mart3ndo

Hi,

I should have said that the credit limit is £340 and it's now just below £500. I'm getting a £12 overuse fee and a £12 late fee every month. I'm just wanting to stop all these charges so I don't have to owe even more in the future. It would take me a few months to just get the £160, but by then it would be more I owe them.

CannyJock

Ouch. Sounds like you're needing debt management advice, your credit report will show these missed payments and that you've exceeded your credit limit.

I'd post again on the Debt-Free Wannabe . Explain that you've exceeded your limit and are no longer able to make the minimum repayments. They can help you not only on the best way to close the card but also with advice and support on how to repay the balance that you owe.

The damage is already done to your credit report so don't think you've got much to lose by the debt being flagged as being put on a repayment plan.