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Credit Card Cancelled? Outstanding Balance?

Hi Guys,

I applied for and got a new Credit Card about 3 weeks ago.

The intention being to transfer a balance from another credit card which was authorised and went through about a week ago.

I got a letter today from their Investigations Department saying I have to provide a whole bunch of information within 7 days of the card cancelled and account closed.

Now this should be all OK but....

What would happen to the already successful and approved balance transfer that went through already if the card does get closed down?

Do they ask my other Credit Card Company for a refund of the Balance Transfer?

Also what would happen if there was not sufficient credit available on the original card to actually process a refund now, if one was asked for?

It's a manageable situation but I am a little concerned.

Any advice?

Comments

  • Tixy
    Tixy Posts: 31,455 Forumite
    edited 13 February 2013 at 7:19PM
    In a similar situation I have seen, the transfer could not be reversed and the customer could not pay off the debt on the new card in full, they had to arrange to repay in installments but ended up with a default on file from the new card company.

    Not sure whether it is always the case that they cannot return the transfer amount, but they could not in that case.
    A smile enriches those who receive without making poorer those who give
    or "It costs nowt to be nice"
  • Thanks Tixy
  • izools
    izools Posts: 7,513 Forumite
    1,000 Posts Combo Breaker
    Tixy wrote: »
    In a similar situation I have seen, the transfer could not be reversed and the customer could not pay off the debt on the new card in full, they had to arrange to repay in installments but ended up with a default on file from the new card company.

    Not sure whether it is always the case that they cannot return the transfer amount, but they could not in that case.

    Surely this is a breach of contract?

    Credit cards aren't repayable on demand like overdrafts.

    If the credit card company rescind their decision they should block new spending and leave the repayment terms the same as per the credit agreement.

    Putting a default on a borrowers credit file when they haven't failed to make repayments as per the credit agreement is a breach of said agreement and a breach of DPA. I would think there is more to the story than meets the eye.

    In your case OP, I would imagine your repayment terms will remain the same but new spending will be blocked. If not, you have every right to raise a formal written complaint and take it to the ICO and FOS if necessary.
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  • Thanks Izools, yes that would be a worry if they did close the account and then demand the full balance immediately or face a default.

    It all seems rather strange that they give me the account, let me use it (as in to make the balance transfer) and then say that my 'application is under review' a couple of weeks later.
  • Tixy
    Tixy Posts: 31,455 Forumite
    Barclays had a phase of doing it quite a bit engsnayl.

    Izools - I admit I can't remember all the details of the thread. Don't some card providers now actually include a clause that in effect almost does mean that they can withdraw the entire facility and are pretty much repayable on demand.
    A smile enriches those who receive without making poorer those who give
    or "It costs nowt to be nice"
  • izools
    izools Posts: 7,513 Forumite
    1,000 Posts Combo Breaker
    Tixy wrote: »
    Don't some card providers now actually include a clause that in effect almost does mean that they can withdraw the entire facility and are pretty much repayable on demand.

    /scuttles off to read all of his credit agreements...
    Cashback Earned ¦ Nectar Points £68 ¦ Natoinwide Select £62 ¦ Aqua Reward £100 ¦ Amex Platinum £48
  • Tixy
    Tixy Posts: 31,455 Forumite
    izools wrote: »
    /scuttles off to read all of his credit agreements...

    Hmmm I could be wrong, but I thought there had been some posts/quoted terms to that effect, maybe I am tired tonight and mis-remembering things.
    A smile enriches those who receive without making poorer those who give
    or "It costs nowt to be nice"
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