Accept Barclaycard Paydown plan at 0% interest?

Elsa5705

Hello - I'd be grateful for any advice from the DFW's.

I contacted Barclaycard to negotiate after they sent me a Paydown Plan request because I have been in 'persistent debt'. I owe 10500 on my Barclaycard. I told them I could not afford to make additional payments to the monthly amount I am already paying and that I had other more expensive debt. I gave them income/expenditure detail. They offered me a 47 month paydown plan at 0% interest paying £180 a month. My card will be suspended (I don't care about that) and there will be a mark on my credit file because they are 'paying back' £1918 in order to make the payment plan possible. They will not send out paper details so I need to make a decision on the phone.

I'm taken aback - I did not expect the interest freeze. I mean, as far as I can see this would be extremely helpful - I have three other credit cards that I'm paying off and an overdraft. I pay the minimum on these plus an additional £200 a month which at the moment is paying off my overdraft and then will be used to snowball the creditcard payments. There is no penalty for paying more on the Barclaycard when I'm able. I've used a snowball calculator and have worked out that with this plan and nothing else changing I can pay off all my debts in 4 years or less (with three credit cards and an overdraft my debt is over £20000 at the moment). Obviously, I hope I can squeeze more out of my income and pay off things quicker but I've spent ages tweaking things and I can't do more than I am just now - though things could change for better or worse in the space of 47 months of course.

My credit rating is already very poor. I cannot get a 0% credit card of a normal type - at least not at the moment. I've been doing quite well with debt repayment for over a year and my credit rating does not change - so no option to clear debts faster using balance transfers or consolidation loans.

Am I missing something? I know that this will make a mark on my credit file but how much worse could that be than my current situation? Any thoughts would be helpful as I'm really not sure what to do.

[Deleted User]

Assuming it's an arrangement marker, you'd be better off defaulting, rather than having another 4 years of negative markers on your files.

Elsa5705

Deleted_User said:

Assuming it's an arrangement marker, you'd be better off defaulting, rather than having another 4 years of negative markers on your files.

Thanks. ... I don't know if it is an arrangement marker that would appear on the file - on the phone the person I spoke to said that the impact on my credit file related to the £1918 that Barclaycard were 'refunding'. I have two other paydown plans in which my cards are frozen (the interest is not 0% on those) and these don't seem to show up as a red mark on my credit file as far as I can see from the MSE Credit Club Credit Report.

Suseka97

Without a little more info on the two other 'frozen' accounts - it looks like you must be paying at least the minimum and being charged interest too - so they wouldn't be recorded as an 'arrangement to pay' which would adversely affect your credit file.  But the pay down plan with BC will be - they've said as much, which means they will put a marker on your file (AP/AR or similar).  That marker will adversely affect your credit file and will remain on record for 6 years after the account has finally been settled.

You may benefit from having a conversation with one of the debt charities (National Debtline, StepChange, Payplan) who could help you assess your whole debt situation and advise on the best course of action.  It's just a phone call and its better to be more informed before pressing ahead with BC.

Elsa5705

Suseka97 said:

Without a little more info on the two other 'frozen' accounts - it looks like you must be paying at least the minimum and being charged interest too - so they wouldn't be recorded as an 'arrangement to pay' which would adversely affect your credit file.  But the pay down plan with BC will be - they've said as much, which means they will put a marker on your file (AP/AR or similar).  That marker will adversely affect your credit file and will remain on record for 6 years after the account has finally been settled.

You may benefit from having a conversation with one of the debt charities (National Debtline, StepChange, Payplan) who could help you assess your whole debt situation and advise on the best course of action.  It's just a phone call and its better to be more informed before pressing ahead with BC.

Thanks so much. I've just called Barclaycard back and they confirm that it would be an AP mark on the credit file. So I will take the advice and speak to the charities first about what the best option is.