end of my tether...

UncleSyd

Some weeks ago I spoke to my bank regarding an incident in one of their branches and the Regional Director was kind enough to investigate and recommend a course of action for the staff member concerned. This is not the first time I've been roughly treated in my local branch, I had the same approach by another member of staff at the same branch some months earlier and after a *very* loud complaint I was given a small amount of compensation. I didn't want it really, I wanted the Bank to understand how badly some of it's customers are treated and more importantly how their bullish attitude effected people.

My original circumstances are the same as now, in that in August last year I made the decision to ‘downsize’ from the high stress consultancy roles I’ve been employed in over the last few years and find a similar (but less stressful) employment locally. Given my work record and skill-set this was not difficult to do; I have been employed by a local business since September of last year. As part of the downsizing I massively reduced my outgoings in respect of many things; renegotiated mobile phone contract, smaller car, various other monthly costs and brought my monthly expenditure in line with my income (£48k before tax & therefore £2850 per month take home pay) giving me a reasonable disposable income; I do not live expensively, I don't drink or smoke and my one luxury is having the occasional dinner out. What I omitted to do when I downsized was clear my credit cards and overdraft, this was not a deliberate act but simply an omission on my part. I visited my local branch early 2018, explained the circumstances and asked if I could move these items to a monthly payment scheme and reduce the Overdraft & Credit limits to insignificant / nil amounts, this request was very bluntly refused and the bank have not said why. I do not have a bad credit record (I have a paid Experian account and it's not in the 900's but it's reasonably close), I live well within my means and do not waste money.

I have taken some time to talk to various agencies and advisors over the last couple of weeks and all of whom without exception feel that I’ve been very harshly treated (one advisor use slightly more colourful language!). All of them suggested/recommended that I talk with the bank again to see if a solution to this can be found and I have done this but with no result apart from the fact that additional Hard Searches have been placed on my credit file. I have previously asked to move the card / overdraft (approx. £6500) to a loan repayable over 18 months as a monthly payment even at 29.9% interest is less than the interest.

As far as I can work out if I continue to pay as I am doing at the minute I'd pay over £ 5,500 in interest over a 2 year period and still owe the original amount; if I could move this to a reducing loan then £400 a month for 2 years means the debts are cleared and I'd be less of a risk to the bank. As I've already got the borrowing why can they not simply consolidate it into a single repayment loan and ultimately lessen their risk? I was told by 2 different advisors, both from charitable debt counselling groups that the bank want me to continue to pay the interest as they can see from the figures I've given them I have a reasonable disposable income and can afford the interest; in short, it would lessen their income if I moved to a reducing loan basis.

In addition I went to a debt counselling group last night and ended up comparing notes with a chap in *very* similar circumstances; slightly different amounts of money owing; his was slightly more than mine but his income is considerably lower but otherwise in an almost identical situation. His credit score is way less than mine yet he has been offered a consolidation loan at a reasonably sensible rate.

I'd be interested to hear other peoples comments experiences and maybe from a more enlightened banking organisation that is possibly willing to assist.

As a final comment I should say that this has left me feeling extremely depressed to a point of despair.

lewishardwick

You have knowingly put yourself in a situation where you debt vs income is clclearly concern to your bank.

If you have an overdraft that you enter (or stay in) every month then no matter how frugal you say you are, you're not living within your means. I used to do exactly the same thing.

You need to haul yourself out of your overdraft asap and stop paying horrendous charges. It is not the banks responsibility to do this for you.

Be careful with complaining too much. If I had a customer such as yourself making too much 'noise' Id be looking for the terms that can recall all owed debts. Then you'd really be in a sticky situation!

[Deleted User]

UncleSyd wrote: »

I'd be interested to hear other peoples comments

It all seems pretty straightforward.

Cut your costs and throw surplus cash as the highest rate debt. You have a decent income and the debts are not high. It's nothing that a little determination won't soon fix.

Finally of course, remember to stop look at your credit score or comparing it to others. It's like saying my imaginary friend is taller than your imaginary friend.

UncleSyd

(Text removed by MSE Forum Team)

ZX81 ... thank you, sensible advice.

System

Quite clearly you do as you have both an overdraft and a credit card balance. People who live within their means don't have an overdraft and if they have a credit card balance it is one cleared in full every month, there is nothing carried over to the next. Just because you can afford to make repayments on debt doesn't mean you are living within your means. Debt is accrued because you have purchased goods or services you couldn't afford without borrowing money you didn't/don't have. Debt isn't accrued because you don't spend more than you earned.

I simply omitted to appreciate that I had to completely clear the overdraft and card down as part of downsizing. The limits on these two items are £15k and £25k and they have not gone above £3.5k and £3k respectively.

If you're living within your means then you have the money to clear both of these off in full today and don't need a consolidation loan. Consolidation loans are things that those who are in debt crisis use and as a result they often don't work.

Dobbibill

Hi UncleSyd - welcome to the forum.

The bank has done you a huge favour - you won't see it like this at the moment but in time you will see and this is why.

Consolidation loans don't work - even with the best intentions they fail as something throws a spanner in the works before the loan period ends and the other lines of credit are reused.

Can I suggest posting a SOA on the DFW board where you can seek out tailored suggestions to clear the debt you currently have in the quickest way. They may be able to suggest other ways of making your frugal living even more frugal, freeing up more to throw at the debt sooner.

The bank has simply looked at a loan and computer says no - exactly as it would have done had you applied online.

Finally, don't take too much notice of your 'credit score' whether it's above or below 900 is of no interest to the bank or other lender. They will only ever look at your history on your file which at present shows a long standing CC balance that isn't cleared and an OD that is used constantly. On paper what you are asking them to do is increase your available credit from £40k to £46k all while demonstrating you can't clear your debt. (do you see how you may look on paper).

As it stands you can work out which debt is costing you more money and throw any surplus funds at that first
Working through 2 debts is probably easier than one loan as you can focus on bitesize debtbusting.

Ben8282

You say that your take home pay is £2850 per-month.
You say that you have a credit card with a very impressive £25K credit limit and a current account with an equally impressive £15K overdraft facility.
You say that between the credit card and the overdraft you owe £6500, £3500 overdraft and £3000 credit card, although presumably your £2850pm salary is paid into this account which would considerably reduce the overdraft every month until you spend again.
I really don't understand what your problem is or why you are asking to be put onto a monthly payment plan.
Your level of debt is not excessive in relation to income. From the information provided it is difficult for me to understand why you believe that you have a debt problem and have been attending debt counselling groups.
You say that you tried to take out a loan at 29.9% APR in order to repay these debts. Why? A card with a £25K credit limit is unlikely to be a high interest credit builder card. What is the APR on this credit card? Surely it is less than 29.9%. Also, why were you applying for such a high APR loan when there is nothing in the information provided by yourself that would indicate that you would be unable to obtain a loan at a lower APR?
You claim that you will be paying over £5500 interest during the next two years. That equates to £229 per-month interest assuming that the balance remains constant the entire time and never reduces. That does not seem correct to me with the levels of debt that you have. On a normal credit card you should be paying something in the region of £45per-month interest on a £3K balance. As for the overdraft, I can't believe that this is costing you over £180 per-month.
You say that your credit score is not in the 900's. Although the credit score is worthless in itself, this would indicate that there must be some adverse information somewhere in your credit files.
You mention that as part of your 'downsizing' you renegotiated your mobile phone contract. I have never heard of anybody renegotiating their mobile phone contract before. Could you please be more specific as to what you actually did? Similarly you mention getting a smaller car. As you make no mention of selling the old one and having money left over after you had purchased the smaller one, would I be correct if I were to guess this involved early termination of a PCP contract or something similar?
Is this credit card from your bank with the 25K limit the only one that you have? Considering that your income post-downsizing is £48K p.a. I assume that your previous income was considerably more. It is very strange that you have only the one credit card albeit with a very nice credit limit.
The obvious solution to your problem would be to apply for a 0% credit card. With the current high credit limits that you have it would not be an unreasonable expectation to get a sufficient credit limit to cover your current balances.