Tesco credit card expiring not being renewed

Mrsm27

Hi today I got a letter from Tesco to state that my credit card which is due to expire will not be sent out and the account will be closed as they suspect that I may reach financial difficulty. Will they demand full payment or will it be that I pay it down? Can they freeze interest? Or will they charge a higher rate? Any help appreciated. Thanks

molerat

They cannot ask for full immediate repayment unless you have seriously broken the T&Cs.
The interest rate is variable but you can refuse any increase. If you do this you will not be able to use the card any more but as they are not renewing it anyway it doesn't matter.

Carrot007

Most likely is to keep at current interest rate untill you pay off.


However if you are in difficulty please consider not paying untill you default and interest is stopped. Unless you can pay it off quickly the fees will drawf the future interest.


And 6 years of a default will be better for you credit in the long term compared to not being able to make minimum payments or any arrangements if it got to that.

Mrsm27

Thank you for the reply. What does not pay till you have a default mean? If you default what happens? How then can they freeze interest?

Carrot007

Mrsm27 wrote: »

Thank you for the reply. What does not pay till you have a default mean? If you default what happens? How then can they freeze interest?

As in break the contract with them by not paying until they get upset and sell the debt on.


This is only a good option if you are struggling with paments.


Doing this it will make a mark on your credit file for 6 years, which is better than struggling and making arragangements which will stay on for 6 years after you pay it off.


Wheather this is a good idea for you is up to your situation.




Note they will threaten you with court action and such, but this never happens, they will sell the debt on before that.