Unsure if Lloyds TSB sold incorrect policy?

Heart_2

Partner had a gold credit card with Lloyds TSB of £3,000, and overdraft facility with same bank of £400. Been repaying the minimum balance on credit card of £65 per month for several years. Been struggling financially for past 4 months so always in overdraft. Branch called him in for financial review and concerned that he was in overdraft. He wanted to see if they could do something about the interest on credit card so that he could see balance reduce. He was informed that he should take out loan of £4,000 to pay off balance, and overdraft. He would no longer have this overdraft facility and that they will cancel his credit card. He was informed this would be a cheaper option for him and would give him more money per month. He has now to find a repayment of £160 per month for 4 years, we have also recently discovered that they did not cancel the credit card and a repayment of £65 still transferred over (we have since stopped the repayments) but was only recently aware that the credit card is still active. I feel that the bank has misinformed him and is yet to be convinced that from £65 to £160 per month is saving him money when he is financially struggling now.

mrmajika

The vast majority of branch advisers are not allowed to make financial recommendations on this type of thing. By the sounds of it, there was no policy sold as such, but rather a refinance loan.

They should have presented the facts to him allowing him to make an informed decision. The loan will probably save him interest in the long run, compared to the credit card minimum repayment, albeit with higher monthly payments.

regularsaver1

If he had carried on paying the minimum card payment of £65 you say, this would never get repaid

with a loan at fixed payment of £160, you know that it will end and be repaid

He did not have to go with this option, and I agree with mrmajika, it was probabaly more an option given, rather than advice