Lloyds Mastercard Credit Agreement

_Persephone

Hello all,

*Disclaimer* this my second thread, I think I have the right forum, apologies if not.

I have had a credit card with Lloyds for about 8 years, and the debt on it has mounted. Everytime I paid off a large amount, they increased the limit, which I would gradually run up again. I have had various loans to pay off the card too, and as it stands, currently the balance is 5.7k.

It is largely the ridiculous amount of interest on the card that led to my lightbulb moment - the bill was £150 per month, and £100 of that was interest being added on!

I applied for a Barclays Platinum card, to do a balance transfer but was given a £1k limit - not enough to transfer.

I ended up speaking to my CC company after missing a payment for the first time in 8 years. I complained about the interest and they offered me what is known as a "credit agreement". I had never heard of this option before. We went through income and expenditure on the phone, and as the two were equal they asked me what amount I can afford to pay each month. I told them £75. THey have reduced the interest to £25 per month too. They said they will review this after 6 months.

Now by lucky coincidence, I have been able to get some over time at work, so I am doing as much as possible. At the end of the month, I should be able to pay off £800, and in April, £1000, which is pretty good going I think.

I am worried that when the 6 months is up, they will return me to the full rate of interest because I have cleared a large amount of the balance. Any advice? Shall I tell them I won it gambling or something?

Thanks in advance...

jonesMUFCforever

Tell the truth or you will be found out .
The agreement may well have damaged your credit rating (get a copy to see what is on there) so getting another card may be impossible.

You have been given 6 months to sort yourself out - up to you whether you want to use it wisely or whether you will feather the banks profits for many years to come.

_Persephone

I do have a copy somewhere - the guy on the phone told me that it has not affected my credit rating.

I also get a monthly alert for any changes on my profile, and this month's text said there were no significant changes.

"6 months to sort yourself out" Can you please elaborate? 6 months to come up with more money, by proving that I had none in the first place?

jonesMUFCforever

6 months to get your financial house in order - pay off as much as you can then whatever is left will be charged at a commercial rate.
You seem to want them to write off or reduce the interest on a permanent basis - that will not happen - either you pay or your credit file will be trashed.

_Persephone

You seem to have a "tough love" approach which is making me defensive!

It's disheartening knowing that each year £1200 is being added on to my card in interest alone. If there was a way to stop this happening is it not understandable I would try to pursue this? i've had the card 9 years, and feel they have exploited me for long enough!

jonesMUFCforever

_Persephone wrote: »

You seem to have a "tough love" approach which is making me defensive!

It's disheartening knowing that each year £1200 is being added on to my card in interest alone. If there was a way to stop this happening is it not understandable I would try to pursue this? i've had the card 9 years, and feel they have exploited me for long enough!

You spent the money knowing that interest would be added to any unpaid balance - nobody else to blame here other than yourself - they have not exploited you at all you have been stupid enough to live beyond your means.

As I have said they have given you 6 months to sort yourself out - up to you now or kiss goodbye to any new credit for 6 years if they mark your credit file as defaulted.

Fiddlestick

jonesMUFCforever wrote: »

You spent the money knowing that interest would be added to any unpaid balance - nobody else to blame here other than yourself - they have not exploited you at all you have been stupid enough to live beyond your means.

As I have said they have given you 6 months to sort yourself out - up to you now or kiss goodbye to any new credit for 6 years if they mark your credit file as defaulted.

I can't really disagree with the above.

If the OP can pay off 1800 quid in those six months like they claim, then when the interest rate goes back up that will be 1800 less balance that will be accruing interest, allowing them to pay off the remaining debt quicker than they could have done before.

If I were the OP I would be cutting back all unessential outgoings for those 6 months and saving like mad.

_Persephone

Fiddlestick, do you mean actually save like mad, or use all spare cash to clear balance?

I am guess the DFW boards are the only ones that are limited to non-judgemental advice eh? Thanks all the same.

_Persephone

The point I am making is that overtime is not forever. Yes I am using the extra money for a good purpose and clearing the debt. When the overtime is no longer available, I will be back in the poo again. Can I be penalised for my circumstances improving temporarily?

PNPSUKNET

hey they are been mean to you, sure the company should reduce their profits to help. Think they will do myn?

_Persephone

I'll ask 'em. Sort code and bank account?