Will CC providers convert to loans?

robbo_monkey

Hi all

Sorry if this isn't the right forum, but here goes.

I have c.£20,000 on 3 credit cards with Barclaycard. I have built these balances up over the last 5 years. 2 years ago, Barclaycard ramped up my interest rates (without telling me, my complaint's with the Ombudsman at the moment) and I can only afford the min payments. I'm paying £350 in interest a month.

I have tried to get other cards or loans to repay this but my credit rating isn't good (450) and I've been refused.

My last resort is to go to Barclaycard and try to negotiate a conversion to loan or payment plan with a reduced interest rate. Does anyone have experience of this? Does it work?

My bargaining position with them is that I will default at some point if I don't restructure this debt. If I default, then they get nothing and spend a lot of time, money and energy chasing and then bankrupting me...

Ideally I would like to (and can afford to) repay this debt and close the cards over 5 years at 10% APR.

Any suggestions, comments and advice appreciated.

Thanks.

R.

LizD_2

You have nothing to lose by talking to them, but they'll probably be pretty reluctant to make changes.


I would suggest getting in touch with Consumer Credit Counselling http://www.cccs.co.uk/ or Citizen's Advice http://www.citizensadvice.org.uk/ as they can help you come up with a plan for paying the debts back and they have more clout with creditors than an individual.

Tixy

They may consider a loan in your position as you are already in debt to them for that amount. But if they do I would expect it would be at a higher APR than you are thinking.

Negotiating a reduced payment plan is only likely t be possible if you can demonstrate that you cannot meet the current minimum repayments. If you think you can afford the loan you've outlined then it sounds like you can probably afford minimum repayments.

If you can't afford minimum payments and do go on a reduced payment plan its likely that hey will either issue an arrangement to pay (if its a short term plan) or defaults if its longer term.

I wouldn't suggest you mention what you call your bargaining position that if you default then get nothing. They could easily obtain CCJs against you if you default and stop paying, (even if it gets to the stage of bankruptcy they would still likely to get something - as you'd be paying into an IPA for 3years post bankruptcy).

Saints2011

robbo_monkey wrote: »

I have tried to get other cards or loans to repay this but my credit rating isn't good (450) and I've been refused.

Morning, just to add one more point. This score of 450 means nothing Experian, Equifax & Call Credit do not lend money therefore it could be 999 or 99 it makes no difference, read the below article taken from Experian:

"Can I find out my credit score?
You do not have a single credit score or rating. Different organisations take different
information into account when working out your credit score and may have different
scores for different products.
When you apply for credit, organisations do not have to tell you exactly how they work
out their credit scores but should give you a basic explanation of how scoring works
and tell you whether your application has been refused because of your credit score and whether this involves the information held on your credit report."

robbo_monkey

Thanks all for your comments and advice. I'll tread carefully.

Cheers

R.