Can a credit card company 'call in' the debt?

henke_danke

Hi,

Currently running the rule over the best way to finance some home improvements and to my surprise a Money Transfer on an existing card is looking quite good ( @ 0% for a year + a 2% transfer fee).

My main questions/query over this is do credit card companies ever reduce their credit limit with you and then expect you to pay off the debt over and above the new limit - effectively calling in the debt early? Assume all payments met etc

[Deleted User]

No. .

henke_danke

Thanks - suspected not but didn't want to go down that route and get a nasty surprise in 6 months.

stator

Their terms and conditions will allow them to do this almost certainly.
They would have to be reasonable in allowing you to repay it though, so spreading the repayments over a reasonable term, I don't think there's a hard and fast rule about what 'reasonable' would be though.

dazza.mk

They can't call in the debt, they can however reduce your credit limit after you've made a payemnt (should they wish to do so), ie you're maxed out on the card replay £500, they reduce credit limit by £500 so you are still maxed out.

Ben8282

A credit card provider may decline to extend further credit and stop you using the card. They can also reduce the credit limit at any time, although I think that reducing the credit limit below your current balance thereby causing the balance to exceed the credit limit would be unreasonable. However, so long as you do not breach any terms and conditions of the account, the cannot default the account and must continue to allow you to repay the balance by making the minimum payment indefinitely (assuming that you were to so wish).

chattychappy

No is the simple answer.

There have been cases of CCs varying the minimum payment calculation. When MBNA did this a few years back, it got a few people into trouble. Regulations did change requiring higher minimums though it didn't apply to existing agreements. It's questionable how far down this route a CC could go, particularly if you've paid a fee up front.

The only circumstances I can think of where a CC might become immediately repayable are:

1. If you fraudulently obtained the card in the first place. Such a fraud could include lying about your income. This would entitle them to close the account and demand full repayment together with any costs they've incurred. I've never heard of this happening in practice.
2. If there was some kind of crisis and regulators intervened. New legislation could override agreed T+Cs.
3. Your death/insolvency.

rtho782

They can't reduce your limit below the current balance directly, as it would be unfair to report you as overlimit to the credit reference agencies.

They could freeze the account blocking new spending and still require you to make minimum payments.

They could do this and say it will remain that way until your balance is below a certain amount.

They could do this and reduce your credit limit that they report to CRAs every month to your current outstanding balance, making it look like you're using every penny of your available limit.

hamish05064

It is never possible to do so