Frustration with cancelling credit card, advice please

samsward

Hi everyone

I'm new to this forum - apologies if this has been posted before, I know on a lot of forums you are not allowed more than one post about the same thing, I hope this isn't one of them.

I'm after some advice please. Me and my husband have a few credit cards which we are trying our best to pay off. We have cut the cards up - not as a way of cancelling them but just to get rid of the temptation to use them.
I was told recently by someone that I should ring my credit card company and inform them that I have cut up the cards and that I wish to close my account with a view to continuing to make payments every month to eventually pay them off.
I've since read on various websites (including this one) that its NOT a good idea to cancel your credit card account until AFTER you have paid off the balance.
Is this true?
I thought that if I cancelled my credit card account then my interest rate would stay the same, and if the company brought in any new rates that I wouldn't be included in those. If that is the case, then cancelling it seems like the better option...

Help needed please...

Sam

jonesMUFCforever

If you ring them they may put a notice on your credit file alerting other lenders to your 'arrangement to pay'.
IMO this should be done as a last resort.

If you put down some figures for us to see eg who you have borrowed from at what rate and the current amounts outstanding etc we might be able to help further.

There is also the debt free wanabe board who will welome you with ideas how to repay.

izools

jonesMUFCforever wrote: »

If you ring them they may put a notice on your credit file alerting other lenders to your 'arrangement to pay'.
IMO this should be done as a last resort.

If you put down some figures for us to see eg who you have borrowed from at what rate and the current amounts outstanding etc we might be able to help further.

There is also the debt free wanabe board who will welome you with ideas how to repay.

There's nothing in OP's post to say that their accounts are in an AP.

Samsward -

In your situation it would be a good idea to close your accounts and make them Repayment Only

You are correct - you would be immune from any future interest rate increases.

And whoever said it can harm your credit rating is mistaken - there is no difference, as far as your credit file is concerned, between an open and active credit card account and one that has been closed to repayment only. None whatsoever. So long as you maintain repayments, of course

Good luck with getting the debt down! :beer:

jonesMUFCforever

Is that not an arrangement to pay?

izools

jonesMUFCforever wrote: »

Is that not an arrangement to pay?

No, that's different.

An Arrangement to Pay (whether or not the account has been closed / made repayment only) is marked when the cusotmer cannot afford the contractual minimum repayments and comes to an agreement with the creditor to pay a lower figure and the creditor has agreed to freeze interest whilst the customer is suffering debt stress.

I've closed card accounts to repayment only in the past and they've continued to be reported as open active accounts with a credit limit and no AP whilst being repaid.

I've also come to an AP previously on an open and active account, an AP marker was recorded.

Hopefully that clears up the difference between the two :beer:

samsward

Hi again,

Thanks for your advice, we are still considering our options. I think the arrangement to pay thing seems like a good idea though.

The other issue is that now that I have cut up my cards I don't have certain information from them such as expiry date which are things you need to get through the stupid automated service. Its a halifax card, and I can't seem to be able to get through to an actual human being without putting in all my card details - which I don't have..

I like this board - thanks for your advice so far.

izools

samsward - please let me clarify the difference between two things

Closing a Credit Card

This is the process of calling the card company and saying you wish to close the account, that you wish for it to be repayment only.

You won't be able to put new spending on the account, your interest rate is frozen and your credit worthiness remains unaffected


Arrangement to Pay

This is the process of calling the card company and stating that you're suffering financial hardship and can no longer meet the contractual minimum repayments, and you agree new repayments with the card issuer and often they agree to freeze / reduce the interest (not the interest rate).

This will damage your credit worthiness.

You want to close the account - you don't want an Arrangement to Pay. I think matey got a bit confused between the two - I apologise if this confused you in any way :beer:

Good luck!