Pay off credit card totally, and cut up, for a discount

Mikeyorks

NickNik wrote:

Can anyone advise me on what the best approach would be to achieve a discounted settlement figure?

File for Bankruptcy ....... it's the in thing for 2006.:rolleyes:

odLott

NickNik wrote:

Only if the hassle is not outweighed by the financial benefit to me. But hey, that is how banks/credit card companies work, and have teams of lawyers and debt collectors to chase us incessently.

Was it the MD of Barclaycard who said to a Commons Enquiry that he wouldn't use a Barclaycard as the rates are 'excessive'?

Let's see, what would you do if you were MBNA? If your answer is I would settle, then I think you might be onto something. I recommened you open a credit card company and please, let me be the first one to apply.

irs101

NickNik wrote:

Was it the MD of Barclaycard who said to a Commons Enquiry that he wouldn't use a Barclaycard as the rates are 'excessive'?

I think it was, but how is this relevant? He chooses to steer clear of borrowing money on them. You, on the other hand, have borrowed a load of dosh on a credit card, and have suddenly had the startling revelation that CC companies exist to make money and, for some reason, you seem to object to that.

Bizarre. I just wish that I could be the one who takes the call at MBNA when you offer them your 'commericial arrangement'. You'll make their day :rotfl:

SparciaM

I think some people are missing the point here. This guy isn't saying he wants to go down the arrangement route with the bank, he wants to call up and say.

"I'd like to pay off my cc in full, as I've been a good customer, good history blah blah blah how much will you take off the card to get the money back." ie i'll give you 12k instead of 13k - at this first stage the adviser would probably say no and then say "We'll take the 12k and then you can pay the final 1k over the monthly periods" IF this guy admits that he can't pay it (which he can) then it'll go down the arrangements route and a bad history will persue.

BUT Seriously, no bank is going to say yes to a deal like that - they would much rather pass it onto debt management who'll arrange everything and then mess up your credit history. This guy will call, they'll say no - ask if you have problems with debt, you say no and they'll say then pay it back. Conversation ends and you write a cheque for 13K and feel really stupid that you even thought about trying to make a deal with a bank without affecting your history or anything.

IF it worked then cool, I'd be up for that, so would everyone else, but the banking world doesn't work like that - they like to mess with credit, debt etc. Having worked in call centres and debt management and collections these routes are what the bank always do first, they have contincencies in place for people like this.

Seriously, just pay it off in full and then stooze the 13k again to make money out of them. Play them at their own game by being smart not by trying to get out of 1k.

david29dpo

great idea. you dont pay. who ends up paying? all the rest of us in increased charges! have you been beaten up yet?

sarymclary

[/QUOTE]In fact what you descibe happens hundreds of times per day in the Uk between companies. They settle as long as the payment is above their cost price, and everyone goes home happy.[/QUOTE]


NickNik, since you already appear to be an authority on this subject, and have some kind of 'insider' knowledge about how Banks work, why on earth are you posting on here? Clearly, unless one of us had responded with a comment such as 'offer them 5k mate, take the money and run - good on yer', you weren't going to be happy.

The rest of us posting on here were under the wrong impression that you wanted some sound advice, (which is always to be found on this site) and all appear to have been warning you about making a regretful mistake (even those with experience of the situation you are considering embarking on).

If you read back through this thread, I think you will see that everyone has answered your original question - you just didn't get the answer you wanted! You're probably best to stamp your feet, beat your fists in frustration at us all, then pick up the phone and go ahead with your wise non-commercial offer to MBNA, I'm sure they'll be intrigued with the opportunity to deal with you. Good luck - and don't forget to get a free credit rating report afterwards.

Oh, and do let us all know how you get on, especially if you're successful. :rotfl:

p.s. if you read my signature below, I'd just like to point out that I paid off every penny I owed, in full - without making any offers, because I had the money to do so.:D

NickNik

I am amazed at the emotion shown. I asked a question, which was how best to present my case to achieve a saving and I was looking for factual answers based on experience. I already have one answer before I asked on here, from a current senior person (director level) of a top 5 bank who took a friend to see his bank manager and obtained a discount on the credit cards belonging to that bank by cutting them up. That was based on only 1 person and 1 set of circumstances, and I can't believe no one else has done it.

The emotional responses are most significant. I assume those who are expressing indignation would not write to their bank asking for money back for overdran charges etc as described on home page of thsi site?

Why do banks and credit card companies win, and achieve obscene profit margins (John McFaul Chair of the Commons Finance Committee)? Because they are business like and cynical in their execution, though teams of lawyers and third party debt collectors. Why do we lose out to them, cos we get all emotional about it.

If I have learned anything from posing my question it is the emotional baggage hanging around credit card customers and a 'do as i did' attitude. That only means nothing changes and nobody learns.

However good luck to all of you whether you agree with me or not.

Will let you know how I get on, and I can tell you now, I will get a discount. It is just how much.

NickNik

BUT Seriously, no bank is going to say yes to a deal like that - they would much rather pass it onto debt management who'll arrange everything and then mess up your credit history.

Which costs them money, Give me their commission as a discount and its faster and easir.

Having worked in call centres and debt management and collections these routes are what the bank always do first, they have contincencies in place for people like this.

Ahhh, contingencies. Sounds as if they dont like to encourage the idea, but obviously THEY have already thought of it.

Seriously, just pay it off in full and then stooze the 13k again to make money out of them. Play them at their own game by being smart not by trying to get out of 1k.

I am not trying to do anything other than give them an opportunity to settle the debt to their advantage, otherwise they wont do it. It is merely working out what those benefits vs their risk is. And putting a price on it.

Tootsie_Roll

NickNik wrote:

Which costs them money, Give me their commission as a discount and its faster and easir.

Having worked in call centres and debt management and collections these routes are what the bank always do first, they have contincencies in place for people like this.

Ahhh, contingencies. Sounds as if they dont like to encourage the idea, but obviously THEY have already thought of it.

Seriously, just pay it off in full and then stooze the 13k again to make money out of them. Play them at their own game by being smart not by trying to get out of 1k.

I am not trying to do anything other than give them an opportunity to settle the debt to their advantage, otherwise they wont do it. It is merely working out what those benefits vs their risk is. And putting a price on it.

If as you say you have worked in the areas you mention then you should know that you have got no chance of achieving your objective. Reduced settlement figures are only offered as a last resort and are not even considered at the start of an arrears episode - it is a way of lenders cutting their losses. As you are not in arrears and have the ability to pay they have no need to make a loss on it.

Start dreaming about something else.

nrsql

Notice you didn't reply to my post.
It is true that companies do this all the time - I've done it myself - the point is that companies are not people and they are administered by departments set up for this sort of thing and the expenses of running those departments are factored in to the arrangements; retail departments will have a much lower expected cost per deal.

>> I already have one answer before I asked on here, from a current senior person (director level) of a top 5 bank who took a friend to see his bank manager and obtained a discount on the credit cards belonging to that bank by cutting them up.

Do you realise why that happened? A director of a bank took a friend to see his bank manager - why didn't the friend see the bank manager himself?

Some people could do this and probably get a result. The banks wouldn't care about the odd 13k especially as they expect you to pay. They do care about the odd high value customer and will give them access to decision makers. To repeat making a decision like this and administering it would probably cost the bank more than the outstanding amount.

Good luck in your endeavours and let us know how you get on.
Make sure you specify that you don't want the settlement to affect your credit record and you might ask how it would be recorded internally with the bank (did your directot and his friend make sure of that?).
Note that even making the request will probably remain on your record internally with the bank but probably not externally - could have unexpected effects as institutions merge.

Also be aware that even going through the process will cause an increase in expenses for the bank. If a lot of people do this it would eventually affect baselines - but then banks would set up cheap routes to cope with it I guess.

Don't have much sympathy for banks so comes under
Interesting and maybe worth a try.
Let us know the reponse - and who it is with maybe?

Won't be attempting it myself.
The concept of taking an interest free loan then immediately paying it back at a discount seems a bit flawed. Easier just to request the difference rather than going through the loan/repayment bit.