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What would happen if

If someone with a average credit rating took out say, 4 credit cards with a total limit of £12k and then spent it all, could they then approach the lenders and say they couldn't afford to pay, default and set up payment arrangements?

Obviously the credit file would be wrecked, but would there be any other repercussions?
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Comments

  • [Deleted User]
    [Deleted User] Posts: 35,383 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    A poor credit file could cause existing lenders to change terms or withdraw credit and it would make getting future credit much more difficult.

    Some people's work require a squeaky clean file, so that can be a problem.

    If fraud was suspected, that could be another issue, but that's generally unlikely without good cause.
  • What does "withdraw credit" mean, they can request that you pay it back immediately?
  • [Deleted User]
    [Deleted User] Posts: 35,383 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    No. Lower limits, cancel cards.
  • boo_star
    boo_star Posts: 3,202 Forumite
    Part of the Furniture 1,000 Posts
    I wouldn't be surprised if you ended up with a CIFAS marker.
  • And why would one consider even doing such a thing?
  • Willing2Learn
    Willing2Learn Posts: 6,294 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    edited 14 October 2019 at 5:54PM
    If someone with a average credit rating took out say, 4 credit cards with a total limit of £12k and then spent it all, could they then approach the lenders and say they couldn't afford to pay, default and set up payment arrangements?
    This is not a plan that anyone here would recommend. It would be an example of a pretty reprehensible attitude toward meeting ones contractual obligations. A very bad idea...

    Edit: I just read your other thread. It appears you are in a pretty bad financial situation. I recommend posting your SOA on the main DFW board to see if there is anyway we can help with your current predicament
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    :smiley:
  • Ben8282
    Ben8282 Posts: 4,821 Forumite
    1,000 Posts Combo Breaker Newshound!
    Credit rating and ability to pay are two different things.
    If you claim inability to pay the card issuers will want details of your change in circumstances and, if the change in circumstances is genuine and you have not lied about your income when applying for the cards, may even initially be sympathetic if they genuinely believe you have suffered some unexpected misfortune which means that you now have so little money coming in that you can't afford to make even the minimum payment. If this were to occur shortly after taking out the cards and spending up to the limits they would be highly suspicious and would wonder if you knew about the change in circumstances in advance which is why you did what you did or if you had lied about your income or something similar that they could class as fraud.
    Assuming that you could convince them that there had been no fraud and avoid a CIFAS marker, your credit files would be showing AP markers and/or defaults, you would find obtaining further credit next to impossible and would have to put up with constant contact with DCA's trying to get you to pay more each month and so on.
    A very foolish plan which is not recommended.
  • This would be a clear case of fraud, a criminal offence.
  • phillw
    phillw Posts: 5,692 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    What does "withdraw credit" mean, they can request that you pay it back immediately?

    I'm sure I've seen that in terms and conditions over the years. Of course they can request it, but if you can't pay it back then that won't get them very far.

    You clearly want to commit fraud, the criminal repercussions should put you off.

    They won't just take your word for it that you can't afford it and let you off.
  • If someone with a average credit rating took out say, 4 credit cards with a total limit of £12k and then spent it all, could they then approach the lenders and say they couldn't afford to pay, default and set up payment arrangements?
    This would be a clear case of fraud, a criminal offence.

    And no doubt you would also scream "irresponsible lending" and want to claim compensation from the credit card companies for letting you have the money to enable you to commit fraud?:huh: :doh:
    A cunning plan, Baldrick? Whatever it was, it's got to be better than pretending to be mad; after all, who'd notice another mad person around here?.......Edmund Blackadder.
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