MSE News: No. 10 to reveal credit card crackdown on Monday

MiserlyMartin

CannyJock wrote: »

How will we lose out?

Did someone invite the Daily Mail Forum regulars over for a Friday night out on the MSE boards?

Funny how people who talk sense with valid points are labelled Daily Mail readers as if thats supposed to be some kind of put down. When all they are doing its pointing out whats wrong with this country rather than burying their heads in the sand, hoping it will all go away - which is what the government hope you will do.

Paulgonnabedebtfree

Although people should be wary and keep debts at the minimum possible, some of the credit card companies are very guilty of suckering people in by having T & Cs that can be confusing.
I will give a recent example from my own experience.
I have an Egg credit card. Quite a while ago, they ran a 6.9% LOB deal even for existing customers. As I was already in a lot of debt, I transferred a high amount across in order that my repayment would make bigger inroads into the capital debt. There was a tiny balance on there which was (and still is) trapped at their current SVR. As it was a good deal, I don't mind this as it's only a few pounds that consisted of some interest that hung over from the previous month. As I've been steadily paying of the minimum payments in the last couple of years, I currently owe Egg around £7k with about £4k unused credit on the card. I never use it for spending of course. I assume that Egg are making a bit of profit out of me as they borrow at LIBOR rates (I think) and these are currently very low. Even allowing for others defaulting and the running costs of their company I imagine there is a small margin there for them - especially as there was a BT fee.
No problem so far.
However, a few weeks ago there was another offer. It was at 3.9% on BTs and it was time limited for 6 months. Now, in the knowledge that credit card companies usually pay off the lower interest balances first, I started to calculate how much I could reasonably repay within those six months with a view to transferring some more debt across. The idea was that my repayments would pay off the 3.9% debt before that portion of it went to SVR. That was when I looked more closely at the T & Cs. Apparently, when there is more than one promotion running simultaneously, the debts are NOT repaid cheapest first. They are repaid in the chronological order that they were taken out. This means that any 3.9% debt that I moved across would become SVR after six months and the only way out of that would be to repay the entire debt (not in a position to do that). Although this wasn't buried deeply in their T & Cs, it didn't exactly leap out of the page either. My feeling is that Egg ought to have made this clearer on the actual offer itself. I felt that they were trying to trick me into getting some debt at SVR after six months. I phoned them up to see if they would do a higher rate LOB but they didn't want to know.
I declined the promotion.
While this definitely legal, I regard it as an attempt at numeric sophistry. It's the sort of practice that does need to be stamped down on IMO because some consumers struggle more than I with T & Cs. I do feel that there should have been some warning with the offer as to what happens when there is more than one promotion running. Indeed, it wouldn't surprise me if I was targetted because I had a high current balance at a favourable rate because they wanted to make a bit more money from me. I would have been interested to know if other current customers with zero or very low balances were made a similar offer.

CannyJock

MiserlyMartin wrote: »

it failed to regulate personal borrowing and dodgy mortgages.

So you're arguing in favour of more goverment intervention?

MiserlyMartin wrote: »

Anyway how does MSE know this, this site seems to be making a lot of government annoucements these days?! Is MSE now Labours mouthpiece?

It's the largest UK forum for people with an interest in their personal finances, which I assume means that it receives press packs. Printed and broadcast media won't put out a story on a Friday saying that there will be a full story to come on Monday. But obviously that's one of the advantages of being online - you can publish immediately for negligible additional cost, giving people advance notice of these things for them to cynically speculate on your motives.

You'll have missed the recent blogs giving a bit of publicity to that well known Labour member, George Osborne?

CannyJock

MiserlyMartin wrote: »

Funny how people who talk sense with valid points are labelled Daily Mail readers as if thats supposed to be some kind of put down. When all they are doing its pointing out whats wrong with this country rather than burying their heads in the sand, hoping it will all go away - which is what the government hope you will do.

I generally attach the label to people who make OUTRAGE posts and broad statements without any substance. What you call "pointing out whats wrong with this country" I call "moron down the pub says". These people are always quick to state what they see as a problem, but obviously it's not for them to propose any possible solution. It's not their job to propose solutions, they're more of a problem-pointer-outer.

Only a Daily Mail reader could take a story "Blind Baby Orphan Pandas Saved" and reply with "Yeah, but what bout British Pandas?" ...

never-in-doubt

Its interesting that some so called stoozers have commented about how good the proposed monkey changes will be (next they'll provide someone to hold our hand when we cross the road yea?) - but unless i'm mistaken 'Responsible Lending' is about just that, so these stoozers that tart their cards will be snookered cos by rights, unless you earn a ridiculous salary then you should be declined accounts.

Excellent, so not only does the government hold a debtors hand that cannot afford but they also hold hands of those that think they can afford.... I love it when they think two wrongs make a right

You just gotta love a bit of labour.. :rotfl:

CannyJock

never-in-doubt wrote: »

Its interesting that some so called stoozers have commented about how good the proposed monkey changes will be (next they'll provide someone to hold our hand when we cross the road yea?) - but unless i'm mistaken 'Responsible Lending' is about just that, so these stoozers that tart their cards will be snookered cos by rights, unless you earn a ridiculous salary then you should be declined accounts.

Excellent, so not only does the government hold a debtors hand that cannot afford but they also hold hands of those that think they can afford.... I love it when they think two wrongs make a right

You just gotta love a bit of labour.. :rotfl:

Would that be me then? From a stoozing point of view, any mandatory increase in minimum repayment isn't good news and any decent stoozer wouldn't be caught out by the allocation of payment rules to begin with

This isn't necessarily good news for stoozing, but for the majority of peope who post on the credit card forum asking every other day about balance transfers or needing a credit card shuffle, a positive allocation of payments across the board (i.e. not just Nationwide) is a massive step forward.

The whole point of stoozing is to make money from the credit card companies. You can do this regardless of your salary - infact, I'd argue that the potential profit as a % of your salary is even greater if you don't have a ridiculously high salary to begin with. Sure, it takes a bit of financial discipline so isn't for everyone, but aren't we here to encourage people to be more savvy with their money?

I've re-read the article again, and still can't see anything negative about it. More than a few people knocking the government but that just smacks of shooting the messenger and ignoring the message.

never-in-doubt

CannyJock wrote: »

Would that be me then? From a stoozing point of view, any mandatory increase in minimum repayment isn't good news and any decent stoozer wouldn't be caught out by the allocation of payment rules to begin with

Nah mate - If it was you i'd have named you, i'm actually being more specific to the "whole forum".... you yourself stated in the past that you know of people with £100k of credit card *available credit* which IMO is absolutely ridiculous. Even someone earning £80k per annum would struggle to convince a lender that lending to them (to stooze or otherwise) would be classed as "responsible lending"...

My point, maybe missed - was that stoozers as a whole should and will feel the impact of *responsible lending*.....

Regards to the allocation of payments, of course it'll affect you, instead of paying out 2.5% per month on repayments (assume £100k balances) £2500 - they could be made to pay 10% (£10,000) which affects the interest earned and therefore kills stoozing dead in the water.

CannyJock wrote: »

This isn't necessarily good news for stoozing, but for the majority of peope who post on the credit card forum asking every other day about balance transfers or needing a credit card shuffle, a positive allocation of payments across the board (i.e. not just Nationwide) is a massive step forward.

Agreed

CannyJock wrote: »

The whole point of stoozing is to make money from the credit card companies. You can do this regardless of your salary - infact, I'd argue that the potential profit as a % of your salary is even greater if you don't have a ridiculously high salary to begin with. Sure, it takes a bit of financial discipline so isn't for everyone, but aren't we here to encourage people to be more savvy with their money?

I agree and this is what i'm trying to get at, i.e. "stoozers try and make money from the CC companies" which as you know full well, i'm in support of anyone taking from them regardless of the method used. So going back to this, why would a CC company give you a new account if they know you're going to stooze it - won't it be the end of stoozing as we know it?

CannyJock wrote: »

I've re-read the article again, and still can't see anything negative about it. More than a few people knocking the government but that just smacks of shooting the messenger and ignoring the message.

I agree - its not so much the finer points but the irony of who is trying to declare the finer points are a good thing - pot, kettle black springs to mind (yet again) :rotfl: :rotfl:

ILW

karatedragon wrote: »

They should go the whole hog and ban credit cards all together. Evil things.

I find mine quite useful.

never-in-doubt

ILW wrote: »

I find mine quite useful.

so do I - makes an excellent coke mixer :eek:

Paulgonnabedebtfree

never-in-doubt wrote: »

so do I - makes an excellent coke mixer :eek:

LOL. Trust you to come out with that.