Closed credit card account, but still paying interest

DShaw

Hi all
I was pondering this last night and wondering if there is a loop hole or if this is even legal in the "My way or the highway" approach that banks and financial institutes have.

Unfortunately, last year I received letters from 2 of my credit card providers who informed me that I no longer could use my credit cards, as I had not been using them, but I had to pay off the totals as usual. My main issue is that I have credit cards, to which I pay £150 and £420 per month on, but the total reduces by £10 each month as the interest is so high.

I am wondering if there is anything I can do (transferring the debt is not an option), but if they are allowed to expect me to pay for the interest even though they cancelled the credit cards.

Moggles_2

Credit card companies are allowed to charge interest until you've paid off the balance on the account.

You cannot borrow any more money on the cards, but you still have the use of the money borrowed before the cards were closed, so it's certainly legal.

Moggles_2

Whether the rates of interest are fair is open to question.

It's now a requirement, following government intervention, for rates on closed accounts to be frozen. In other words, you cannot suffer further interest rate hikes.

To help you further, we would need to know which other credit cards you have or have held recently. Also, which ones were closed.

DShaw

I have a both a closed Egg and Halifax card, with Natwest, Mint and Barclay cards still being used...nightmare situation

GSXRCarlos

can you transfer lesser ammounts to an interest free card, ie £1000 to a 12 months interest free card? and get multiple new cards?- or are all balance transfers completely out of the question???

Moggles_2

Transferring the debt is not an option

Why so? Have you applied unsuccessfully?

I have a both a closed Egg and Halifax card, with Natwest, Mint and Barclaycards still being used.

Have you considered transferring the balance(s) with the highest APR(s) to a new 0% balance transfer card?

For tips to improve your chances of credit card acceptance, have a look at the *Credit Rating: how it works and how to improve it guide* especially Martin's *Manage and Improve your credit score* article

http://www.moneysavingexpert.com/banking/credit-rating-credit-score#improve

To maximise the 0% period, 16 months is currently available to new customers from Virgin. There's a 2.98% handling charge.

http://uk.virginmoney.com/credit-card-v3/

RoyalBlues

Moggles wrote: »

You cannot borrow any more money on the cards, but you still have the use of the money borrowed before the cards were closed, so it's certainly legal.

Is this theory still applicable if you actually spent the money on purchases and therefor do not "still have the use of the money borrowed before the card was closed" ???