Does this sound right?

Bobbby81

Hey everyone,

A couple of my creditors have agree to give me some breathing space by freezing the interest on 2 of my credit card accounts for a 6 month period.

I am continuing to make the contractual minimum payments ( have never missed a payment) and will continue to do so throughout the 6 month period - they will just be interest free. I suppose it's a bit like a self managed DMP, only without the reduced minimum payment. I asked both creditors if there would be any negative impact on my credit file as I didn't want that. They have both told me that as I am continuing to pay the minimum payments there would be no negative impact on my credit report as there would be nothing to report.

Does this sound correct? I am grateful for their assistance, however I would have politely declined if it was going to harm my credit file for 6 years.

I know that I can check my credit reports but they aren't immediately updated so I need to wait a month or so.

sourcrates

You are making the contractual monthly payments, wether they charge you interest or not, in terms of your credit file, is neither here nor there.

It should not affect your credit file in any way, unless they view it as an arrangement to pay.

However, if this is part of a bigger issue, please seek help with it, don't worry about yourcredit report.

Bobbby81

Thanks, I was worried that they might add AP markers to my credit file.

Bobbby81

This morning I decided to be a bit proactive. I emailed one of the creditors and called the other ( no email address available for Barclays) and asked the following questions-

1 - Will the interest freeze be classed as an arrangement to pay
2 - Will there be any negative impact whatsoever on my credit file as a results of the interest freeze.

I have just received a reply from creation telling me that as I am making the contractual payments, there will be no adverse effect on my credit file whatsoever. I will save this email just in case!!

I spoke to a member of staff at Barclaycard in the specialist support Team. He said that as I have made minimum payments there would be no late payments/missed payment markers on m account. I asked if the frozen interest would be considered as an 'arrangement to pay' - He said that it wouldn't as they only issue AP markers when a borrower is making reduced payments, which I am not. I have made a note of the member of staffs name and time of call etc. I am also going to write to Barclaycard to get this in writing.

I suffer with mental health and struggle to cope with the stress of finances etc, therefore I don't want to have to constantly check my credit file etc as it causes me huge anxiety.

EssexHebridean

Bobby, it strikes me that if you are at the stage of needing to ask creditors to freeze interest, there is a bigger picture here which you need to tackle - and that bigger picture is most likely far more important than what appears - or not - on your credit history.

why not have a go at filling out a Statement of Affairs (SOA) - you'll find the link to the one we recommend in the "Sticky" thread at the top of this board - in order to get a proper budget in place and maybe find some savings you can make to increase what you are paying to the cards that you're currently just doing minimum payments for? If you post the completed SOA in here we can take a look and help you to find areas that might need some attention?

Bobbby81

Thank you for your reply

At present I am doing ok in terms of making payments etc. The interest that I was being charged was reducing the amount I was paying off. I am currently in treatment for some quite serious mental health issues so I called my creditors and explained my situation and they offered the interest freeze. I could manage the payments with the interest applied, but obviously I would prefer not to pay if the option is there.

I may do a SOA at some point. Thanks for your help.

sourcrates

Just be aware that 6 months of frozen interest is the maximum these creditors will do for you dealing with customer services.

Any longer than that and you will be passed over to collections, who will probably continue the deal for you, but most likely only for another 6 month period after which it will be reviewed.

At that point you would be asked to accept interest again, or go to debt management.

These arrangements with no repercussions dont last forever.

EssexHebridean

At the very least for the next six months set your DD at the current level of the minimum payment - rounded up to the nearest £1 - this means that you will pay the same amount each month rather than it declining as it would normally, and so you make more impact on the outstanding balances. Do note though that for this to work you MUST have stopped using the cards - although I'd imagine that was also a condition of the interest freeze?

Another plan for you might be to set the DD to the amount that you say you can currently afford - ie the minimum payment including the interest - this will significantly increase the benefit you feel of the interest freeze, so long as your creditors are aware of the full picture as you suggest they are.

Bobbby81

Hi Sourcrates, thanks for your message

I wasn't expecting it to continue after the 6 months so anything extra would be a bonus. Do you think that if it is referred to collections, they would allow a further 6 months interest free with no impact on credit score ( if I maintain minimum payments of course)

thanks

Bobbby81

great advice - I will do what you have suggested

sourcrates

Bobbby81 wrote: »

Hi Sourcrates, thanks for your message

I wasn't expecting it to continue after the 6 months so anything extra would be a bonus. Do you think that if it is referred to collections, they would allow a further 6 months interest free with no impact on credit score ( if I maintain minimum payments of course)

thanks

You would of course have to ask them, but if you have mental health issues then i don't see why not, but ultimately it would be there decision.