Virgin Credit Card - Not really playing ball, Advice needed.

drwillseeyounow

Hi All.
I recently received a letter from virgin credit card telling me that I need to up my monthly payment in line with a FSA guideline about reducing long term debt. 
All acceptable and sensible I thought but the figure that they asked me to pay was LESS than the amount  I have been paying for over a year now. I decided to set a monthly payment about 20% higher than the minimum last year to get a bit of a grip on my balance.
I called them to ask for an explanation and ended up in a very heated discussion as the contents of the letter were, in my opinion, a lie. 

They told me that the actual figure that I would have to pay was not what it said in the letter but in fact another £150 on top of that. I asked them to explain why the this figure stated on the letter was incorrect and he said it was because the calculation was done on 46 months rather than 48. When asking him to explain further it got really frustrating. 
He said, The FSA have issues guidelines to encourage people with long term credit card debt to make arrangements too clear this debt within 4 years. When I asked him to calculate when I would clear my debt should I carry on making the same payment that I have been for the past 14 months, he told me it would be 3 1/2 years. Simple outcome so I thought, so I told him I would prefer to keep things as they are, ie my payments over and above the figure stated in the letter as this will mean my debt is paid within the 4 years the FSA are encouraging.

This is the point that I got a bit annoyed. 
He then told me that as I was not accepting the increase in monthly repayments, he would put an immediate stop on the card! 

How is this allowed? 
Im meeting the requirements set out in the letter and actually have been for well over a year now. I will be paying off the balance within the 4 years that the FSA are encouraging and yet they are still planing on penalising me. 
I read the FSA guidelines and it stated that the lender will have to offer a way to repay their balance in a reasonable period, and if they are unable to pay they must show the customer forbearance which may include reducing, waiving or cancelling any interest fees or charges"

I was happy to clear this debt by continuing with the payments that I have been making along with additional payments as and when but now I am looking into this closer, would I be better off saying I can't pay anything and see if I get a better deal?
I feel if they won't be fair with me why should I be fair to them? 
Any thoughts? 

sasha20

It sounds like you spoke to an agent that may well have been confused themselves - sorry to hear how that went down!

These regulations have been around for a while and the intention is to prevent customers falling into an issue of having persistent debt. Credit cards should begin checking for this after the customer has had a card for 18 months and regularly assess if you are paying enough - the broad definition is that you should be repaying more in principal balance than the sum of all fees and interest you are charged, which on most credit cards is not the case for the majority of borrowers!

I don't have your numbers in front of me, but I think your best bet is to relax, pour your favourite cool drink and then ring them again and try to keep calm and say you just want to clear up exactly what you have to pay as you are already paying substantially more than the minimum payment.

Another thing to consider is this: if you're not actually spending on the credit card, there's nothing bad about them closing it. When they say close, they don't really mean close - they mean your card will have a permanent block applied to it. This means you can continue repaying at your current repayment schedule (as you have a contract and they cannot vary your payment terms unilaterally). All it means is you won't be able to continue using the card, but if you're not using it already, that's not a big deal at all.

It also stops them altering your terms in the future and doing things like increasing your interest rate, so if you don't actually need the card, maybe closing it is a good move!

born_again

A lot of reps get really confused by these letters. It's like when they started sending out annual credit card balances. Customers could not understand them. Even reps got confused. It took a lot of explaining to these reps that a annual statement will never balance up. Due to the way credit cards work.
Can I ask though. Do you still spend on the card? Because if you do that will mean that the balance will not reduce as quick (could this be what got the reps back up?)
You could always raise a complaint on the call and get it listened to. As it could be a great learning point for the person and also Virgin  

drwillseeyounow

born_again said:

A lot of reps get really confused by these letters. It's like when they started sending out annual credit card balances. Customers could not understand them. Even reps got confused. It took a lot of explaining to these reps that a annual statement will never balance up. Due to the way credit cards work.
Can I ask though. Do you still spend on the card? Because if you do that will mean that the balance will not reduce as quick (could this be what got the reps back up?)
You could always raise a complaint on the call and get it listened to. As it could be a great learning point for the person and also Virgin  

Hi. 
He did seem very confused to be fair and kept putting me on hold to "check something". I actually don't think he registered that I was paying a set figure each month until the balance was cleared rather that a reducing figure based on a percentage of the balance. He seemed really confused when he did the calculation based on what I am paying and came out with the fact that I would repay within 3 1/2 years.  Not that helpful really and considering the fact I am self employed and now have no income due to my entire industry (film and Tv) shutting down, I really do not want to lose any available credit that I may need to live on in the coming months! All in all it was a pretty badly timed telephone call.