Overdraft and credit card limits disappeared?

Natztastic

Hello,

I wonder if anyone could help me, it would be reaaaaaly appreciated!

I took out a loan about 14 months ago and was almost done paying it back. ( was for about 2500 and had about 800 to go) and the bank called me suggesting that i extend the loan to pay back my credit card and overdraft to take me back to nil.

I agreed to this and now have a different loan which pays back the previous one and my overdraft and credit card would be paid back to nil.

However i have looked today at my bank, they have paid in the money for the loan but have closed my credit card account and they have taken away my overdraft.

are they allowed to do this?

when i agreed for the loan i agreed that it would be ok to sort the money like this so i had nothing owing. i still need my overdraft and credit cards for emergencies.

I have called the bank and they state that they cannot reinstate the overdraft.

I had no idea about my credit card until now.

Thanks in advance for your help.

jambosans

Natztastic wrote: »

are they allowed to do this?

Yes.

Natztastic wrote: »

when i agreed for the loan i agreed that it would be ok to sort the money like this so i had nothing owing. i still need my overdraft and credit cards for emergencies.

Are you sure? Sounds like a consolidation loan, part of the agreement is the bank effectively transfers the borrowing from your overdraft and credit card to the loan. Then close those lines of credit. So in effect you have the same amount of debt, but now managed over the repayment period of a loan.

Natztastic wrote: »

I have called the bank and they state that they cannot reinstate the overdraft.

Overdrafts are subject to status, you now have a consolidation loan, so the bank have capped any other borrowing arrangements with them (i.e. your overdraft and credit card).

Natztastic wrote: »

I had no idea about my credit card until now.

There's nothing to stop you from applying for a new credit card. I would suggest out with your bank however, otherwise their internal credit history may have an impact.