rate jack

partyisover

hi

rejected a credit card rate jack by aqua (halifax) offered £50 a month

the account was up to date

got a letter today saying we must advise you this will not prevent a default being registered against you and registered in arrears.

omg can they do this!!!! did not say anything in martins guide about this.

oscar52

partyisover wrote: »

hi

rejected a credit card rate jack by aqua (halifax) offered £50 a month

the account was up to date

got a letter today saying we must advise you this will not prevent a default being registered against you and registered in arrears.

omg can they do this!!!! did not say anything in martins guide about this.

If you are aying less than the minimum payment then they can yes.

BugsyBrowne

partyisover wrote: »

hi

rejected a credit card rate jack by aqua (halifax) offered £50 a month

the account was up to date

got a letter today saying we must advise you this will not prevent a default being registered against you and registered in arrears.

omg can they do this!!!! did not say anything in martins guide about this.

Just at least pay the minimum as a default will trash your credit report for 6 years And getting lines of credit will be very difficult.

partyisover

minumu payment was £35 a month and i was up to date.

i offered them £50 a month, can they register a default.

just rang the fos and they cant tell me if they can do this

Cell

What was your usual payment amount?

If it was around £35 to £50 then if you reject the rate increase and agree to close the account they should allow you to pay like that without any question of a default.

Martin's advice is still good in theory though:

The rules state you will get a 'reasonable' time to repay it – which is rather vague but will usually be defined by individual circumstances.
To help, we asked the Financial Ombudsman Service for its thoughts:

"If a consumer has been repaying the minimum amount historically on the card, it may well be reasonable for them to continue to be allowed to pay the minimum rate. We have not had to issue an ombudsman's decision on this yet and we would, of course, consider the individual circumstances of the case before doing so."</STRONG>

Here's what the lenders' body the UK Cards Association says:

"What we've not done is define reasonable but if, for example, I'd only been making the minimum repayment (because that's all I can afford) on a £4,000 outstanding balance, I wouldn't expect my bank to turn round and expect me to pay back in 3 months. So even historically if I'd missed a minimum repayment, I would still expect to be given the same terms as others to repay in a reasonable period."</STRONG>

Therefore if you were previously paying the minimum repayments, it is likely to be possible to keep doing so, though if you were paying more previously and decided to start paying less as a result this may be deemed 'unreasonable'.
It's also worth noting there's no ‘you mustn't have broken the t&cs rules' get-out for lenders here, so even if you have missed or made late payments this should still be allowed.
Any catches? Do ensure you've got a direct debit in place to make payments each month on time (you can always manually pay more). Failing to do that could kibosh the whole thing.

However while looking for some links on this I did find something about the Co-Op demanding repayment in six months. Even then the balance would simply shift to the new rate. I don't know how this played out in the end:

http://www.moneysavingexpert.com/news/cards/2011/02/co-op-breaking-spirit-of-anti-rate-jacking-card-rules

I can't see how you can be accused of 'defaulting' if you pay at, or above, the minimum payment percentage:

oscar52

partyisover wrote: »

minumu payment was £35 a month and i was up to date.

i offered them £50 a month, can they register a default.

just rang the fos and they cant tell me if they can do this

If you are paying more than the minimum amount, they cant register a default (unless you dont pay on time)

What they can do if you have rejected the rise is to close your account to stop you using it, and you continue to pay at your current rate.

partyisover

the letter from halifax says " we accept your offer but we must advise you that this will not prevent a default being registered against you with credit ref agencies that we subscribe to"

fsa have just passed me to oft as they deal with credit cards,

partyisover

and the oft 0845 722 4499 goes to citizens advice number

Cell

oscar52 wrote: »

If you are paying more than the minimum amount, they cant register a default (unless you dont pay on time)

What they can do if you have rejected the rise is to close your account to stop you using it, and you continue to pay at your current rate.

From what we've been told at least the minimum is being paid and yet there's threats being made.

If you look at the link I put above the Co-Op decided that any balance should be re-paid within six months - their definition of reasonable - or else the card holder was deemed, by default (in a different context) to have accepted the rate increase.

I still can't see how a 'default' can be registered though. It would be useful to see the entire letter.

ILW

partyisover wrote: »

the letter from halifax says " we accept your offer but we must advise you that this will not prevent a default being registered against you with credit ref agencies that we subscribe to"

fsa have just passed me to oft as they deal with credit cards,

I am confused. If you are going to continue paying at least minimum payment there is no "offer". Is this a negotiated minimum payment or just as per standard terms?

partyisover

okay panic over

rang the halifax collections center and they said the letter was a mistake as I have no accounts in arrears.

rang aqua and they denied the letter and said the account was not in arrears, and said I could close the account today and they would accept £50 a month no problems.also got them to credit my account £5 as I had rung loads of 0845 numbers.

so martin was right.