Credit Cards - Definition of 'Default'

Gleepee

Hi all,

May seem like a foolish question, but if the interest applied to my card balance places me over-limit one month, am I in 'default' even though that over-limit amount is included in the next minimum payment due ?

My card provider has pulled my credit (and demanded full settlement of the outstanding amount) based on this. I would not think it reasonable to suggest that I had defaulted when, in fact, I'm over limit but only so due to the interest.

NB - I have, in the past, always paid on time, overpaid or settled in full.

Thanks

brians_daughter

Yes, you are. You havent kept teh T& C of teh agreement.

There are 2 types of default we can talk about..ie a 'default payment' ie you get charged when over limit not paid etc. ie £12 charge for late payment, £12 for being over limit etc

Then there is a default in terms of credit report default is usually issued when you have failed to pay minimum payment and within a period of time, usually 4-6 months the account will default and you will be served a default notice. The company must default you prior to seeking a CCJ. A default means you havent paid and that all reasonable methods to resolve the issue have been extinguished, ie a breakdown of the relationship between you and the creditor

Tixy

You should keep your balance at a level that you won't go over your credit limit at anytime during the month. If you breach the limit even for just a day then you have not adhered to the terms & conditions of the account.

Your credit card company can reduce your limit or close your account at any time.

If it has happened just once you may be able to ask them to reconsider closing the account but I doubt that they will change their minds. However if you cannot affored to settle the entire outstanding balance I would write to them with a proposed monthly repayment plan.

If your credit card is with the same bank as your bank account then they could offset money from your current account to repay this debt. Also if they are the same account I would be wary that they may also recall your overdraft if you have one.

Gleepee

There was no overlimit or late payment discussion - they simply closed my account (by which I mean my current account and credit card account held with them) without notifying me. I only found out when I went to make a purchase using my debit card on the current account and it was declined - at which point they advised me that they had decided to terminate my relationship with them as my credit card was 'in default' - i.e. over limit due to the interest that they had applied some 15 days earlier.

PNPSUKNET

think there maybe more to this than the op is saying

izools

Gleepee wrote: »

There was no overlimit or late payment discussion - they simply closed my account (by which I mean my current account and credit card account held with them) without notifying me. I only found out when I went to make a purchase using my debit card on the current account and it was declined - at which point they advised me that they had decided to terminate my relationship with them as my credit card was 'in default' - i.e. over limit due to the interest that they had applied some 15 days earlier.

It sounds like they were just looking for an excuse to get rid of you TBH.

My current accoutns were closed with Barclays in a similar manner in January.

Never been 1p overdrawn or incurred 1p charges, each account saw £1,000+ turnover each month, but they wrote to me terminating my relationship with them stating "I no longer meet their criteria"... they confirmed it had nothing to do with account conduct or credit score but wouldn't confirm what it was to do with.

So similiar thing? Just didn't like you?