credit card cash interest crippling

bunnywabit69

hi i been searching a way to try beat the cash interest but seems my husbands the only one with the issue! we used his card back in 2006 to withdraw some urgent cash, also played online bingo with the card unaware of the high charges, its now 2013 and this cash interest is still going.... he not had a card issued since 2008 balance was 4600 then and still have only got it down to 1900, they have had thousands back... at one point for over 2 yrs the minimum payment of £100 only just covered the £98 cash interest charge! since we realised over 1 yr ago what was going on we have been paying of chunks to reduce it but its still at £48 month cash interest charge! surely this is ilegal somewhere same as late payments and over limit fees... weve paid the 4600 back like 3 times over but due to the interest were just not gettin to the end.

Tiglath

What's the APR on cash advances on the card? It's likely to be higher for that and online gambling than ordinary purchases. Can you balance-transfer to a 0% card in the meantime while you pay off the remaining amount?

Roland_Sausage

Been there, done that, bought the T-shirt.

Not sure which card you are using, but for a few cards the minimum payment is the estimated interest plus a nominal amount, eg £5 or so.

Paying the minimum payment is ok now and again if you need the cash for other things, but if you only ever make the minimum payment every month it will take you forever to reduce the balance.

The key to beating this is to pay significantly more than the minimum payment, or balance transfer to a lower interest rate (0% if possible) card.

PS, it's not illegal. The minimum payment is exactly that, a minimum. It is not a recommended payment amount or the only amount that they will accept.

[Deleted User]

bunnywabit69 wrote: »

surely this is ilegal somewhere same as late payments and over limit fees

When did late payment and overlimit fees become illegal?

StevieJ

Deleted_User wrote: »

When did late payment and overlimit fees become illegal?

When it became obvious that they were charging more than the requisite admin costs.

The legal argument on unfair charges is based on contract law saying that if you breach a contract, for example by late payment, then the credit card company can charge you and the courts enforce payment, but the sum must reflect the cost incurred by the bank and not be punitive. If the credit card company argues that the charge is for a service, it is possible to argue that under a separate act the charge must be reasonable.
The Office of Fair Trading strengthened credit card customers arguments when it ruled last year, that card companies shouldn't charge more than £12 for default charges, and would have to provide substantial evidence if they did.

http://www.thisismoney.co.uk/money/cardsloans/article-1604621/Ten-steps-to-reclaim-credit-card-charges.html

[Deleted User]

I stilll don't believe they're illegal. Only that the amount being charged was challenged and capped.

StevieJ

Deleted_User wrote: »

I stilll don't believe they're illegal. Only that the amount being charged was challenged and capped.

No they are not illegal providing they are proportionate, pre 2008 they obviously weren't, so not legal and would almost certainly have resulted in a positive outcome from the customer if taken to court. I think this was what the OP was alluding to.