HSBC Bank loan

marktheman1962

Hi - just taken out an HSBC loan for 15k to consolidate debt. During the application process I was asked to close the two credit cards after clearing them with the loan, Barclaycard (17k limit) and Bank of Scotland (16k limit).
Question - Now I've cleared them, am I obliged to close them?
Thank you

[Deleted User]

If that's what they said, then yes.

You could take the view that they may not check, but it may give them the right to call in the loan if they did. I would close them and open a new card account if needed.

JuicyJesus

Why would you want to keep them? If you were to use them again, could you afford to pay them back all at once?


It seems stupid to clear the cards with a loan and then leave them open again to run up a new balance.

marktheman1962

I don't want to get into the reason why I wish to keep the cards with a zero balance. I want to know if I am under any obligation to close them. The loan agreement I signed does not mention the requirement to close the cards it was only during the application process that I said I would.

Oakdene

You said when you applied that you will close the cards once you clear them with the loan... you can keep them open but don't be surprised if they check & call in the loan because you haven't done what you said you would.

marktheman1962

If I make the monthly payments I think they would be in breach of contract to call in the loan. As I said there is nothing in the contract I signed relating to my credit cards or indeed the purpose of the loan.

Oakdene

Guess its similar to applying for a job saying you've got qualifications then getting offered the job & actually not having the qualifications...

Pixie5740

I can't read the T&C of your loan from here. However, I thought the whole point of consolidating (which I'm not a fan of) was to restructure your debts and pay them off. If you keep the credit cards account open what's to stop you overspending again and ending up with another £15k of credit card debt and the loan?

marktheman1962

Good point but I would imagine the written job offer would be subject to obtaining references and qualification documents.

I have signed a written contract, I am not sure if a written contract supersedes a verbal contract making any verbal declaration prior to the signing of the written contract unenforceable.

marktheman1962

Hi Pixie, I am not after a moral judgement - just the legal answer to my original question.

Oakdene

I'd close the cards just to be safe.

That said & as you seem so eager to keep a card or two open there is nothing I guess to stop you opening another card in a month or two...