Persistent Debt new Credit Card Rules

SnowTiger

Tigers wrote: »

I thought I posted a valid warning that I believe some credit card companies may not be applying the persistent debt rules correctly so people could check and be aware.

This is the eighteen month milestone for some customers on their persistent debt path. At this stage credit card companies should only be sending warning letters to customer who are in persistent debt.

The 36 month milestone is when credit card companies should get tough.

Perhaps some credit card companies are throwing their nets a little wide, concerned they will be accused of not doing enough in the future.

The FCA is unlikely to chastise a credit card company for encouraging its customers to pay off their debt early.

Nebulous2

Tigers wrote: »

A warning: I don't think companies are applying the persistent debt rules correctly.
I just had another contact from a credit card company saying that my account is in persistent debt yet the account has been closed for years.
So the only charges have been interest charges and the monthly payments are always more than those and so the balance has been steadily reducing - how can it be in persistent debt?
This makes 2 companies who I believe are not correctly applying the rules.
Has anyone else has this issue?

I understood, though I can't remember where I saw it, that companies were issuing a warning where only minimum payments had been made in the last 18 months.

Ergates

Tigers wrote: »

A warning: I don't think companies are applying the persistent debt rules correctly.
I just had another contact from a credit card company saying that my account is in persistent debt yet the account has been closed for years.
So the only charges have been interest charges and the monthly payments are always more than those and so the balance has been steadily reducing - how can it be in persistent debt?
This makes 2 companies who I believe are not correctly applying the rules.
Has anyone else has this issue?

You should think of the FCA rules as the minimum standard to which lenders have to adhere. Lenders are totally within their rights to apply a stricter set of rules than the FCA - as long as they meet the minimum then they aren't in breach.

Howard511

Strangely i received a text message from MBNA on a 0% credit carc i am using to clear down debt. I make some extra payments in addition to the minimum each month trying to clear the debt down. I was surprised to get a message from them saying "Making extra payments will not reduce your monthly minimum payment". This seems to be encouraging people not to make extra payments so having a larger debt remaining at the end of the 0% period. I realise that the payment that month will be unaffected. However, subsequent payments will be reduced. has anyone else been getting this badly worded warning?

SnowTiger

Howard511 wrote: »

Strangely i received a text message from MBNA on a 0% credit carc i am using to clear down debt. I make some extra payments in addition to the minimum each month trying to clear the debt down. I was surprised to get a message from them saying "Making extra payments will not reduce your monthly minimum payment". This seems to be encouraging people not to make extra payments so having a larger debt remaining at the end of the 0% period. I realise that the payment that month will be unaffected. However, subsequent payments will be reduced. has anyone else been getting this badly worded warning?

Do you pay the monthly minimum by direct debit?

MBNA has this policy: "Direct Debit payment will be taken regardless of any additional payments you make."

Halifax has recently introduced a similar policy.

Halifax and MBNA (UK) are part of LLoyds' stable.

Bonniepurple

I have been shocked by Barclaycard. First of, they said that it wouldn’t affect me as I paid over the minimum. Then they said I needed to pay £404/month (I pay £350), then the statement said £396. I then got an email today advising me to pay £615. It was only when I read it properly that it said this was optional.

Before people criticise me, yes, I have a large balance. Yes, I am reducing it, although not as fast as the new rules. Yes, I will be able to clear it completely in a year or so when my rental property sells. Yes, I would like to pay more, however 3 different figures ranging over £200 difference in the space of 3 weeks in a period when I have paid for secondary school uniform, transport costs to school, and have a car service, MoT and brakes coming up makes life very difficult to budget.

Mind you, I got nasty texts a few years ago from Barclaycard when I missed a few pence off my payment (I paid X, and it should have been X.OX). In that case, a phone call (did you realise- oh no, I’m sorry, I’ll pay it now) would have been better than “you have failed to make a minimum repayment”.

[Deleted User]

Bonniepurple wrote: »

Mind you, I got nasty texts a few years ago from Barclaycard when I missed a few pence off my payment (I paid X, and it should have been X.OX). In that case, a phone call (did you realise- oh no, I’m sorry, I’ll pay it now) would have been better than “you have failed to make a minimum repayment”.

Customers aren't prepared to pay for personal phone calls when they miss a payment.

chattychappy

Deleted_User wrote: »

Customers aren't prepared to pay for personal phone calls when they miss a payment.

Well, they do charge £12 for missed payments...

Ergates

Bonniepurple wrote: »

Before people criticise me, yes, I have a large balance. Yes, I am reducing it, although not as fast as the new rules. Yes, I will be able to clear it completely in a year or so when my rental property sells.

If you can really clear it in 12 months then you have nothing to worry about. After the first letter, nothing will happen for 9 months, then you'll get another letter. Then, after another 9 months (i.e. 18 months after the first letter) they'll contact you again - it's at this point they might close the card.

If you think it might take 18+ months (from now) to clear you balance, then you should make sure you're paying at least *slightly* more off your balance than you're paying interest. e.g. Each month see what the interest charged is, then pay double this plus a couple of quid.

elliesmemory1

Bonniepurple wrote: »

I have been shocked by Barclaycard. First of, they said that it wouldn’t affect me as I paid over the minimum. Then they said I needed to pay £404/month (I pay £350), then the statement said £396. I then got an email today advising me to pay £615. It was only when I read it properly that it said this was optional.

Before people criticise me, yes, I have a large balance. Yes, I am reducing it, although not as fast as the new rules. Yes, I will be able to clear it completely in a year or so when my rental property sells. Yes, I would like to pay more, however 3 different figures ranging over £200 difference in the space of 3 weeks in a period when I have paid for secondary school uniform, transport costs to school, and have a car service, MoT and brakes coming up makes life very difficult to budget.

Mind you, I got nasty texts a few years ago from Barclaycard when I missed a few pence off my payment (I paid X, and it should have been X.OX). In that case, a phone call (did you realise- oh no, I’m sorry, I’ll pay it now) would have been better than “you have failed to make a minimum repayment”.

Ive been confused by this too. I had a email telling me to pay one amount but saying if you cant afford that pay at least the minimum payment. Its a bit odd.