Credit card closure

lancstulip

Can can a credit card lender close you account when you haven’t missed any payments, pay more than the minimum monthly amount and haven’t taken a payment holiday in the pandemic? I received one of those letters in March just as lockdown was about to start to say basically that I wasn’t paying off my card balance quickly enough and warning me not to ignore the lender otherwise my account would be closed. So I contacted the lender and explained that I was concentrating paying off another card at a higher rate (while continuing to pay over the minimum on their card) and once that was paid off I would then be able to pay more to pay off their card. I didn’t spend any more on the card and continued to pay more than the monthly minimum but when my card expired in May I wasn’t sent a new one. On the one hand that was good as I couldn’t spend any more but at the same time should this have been done without notice or discussion in a pandemic? I was able to transfer some of the balance to a 0% card also reduced the balance by my payments too. My annual statement which came in October shows that I have paid off more than half of the outstanding balance in March and more than the (high) interest charged in the past year, so it was a shock to receive a letter today saying that my account was now closed. What was the point of contacting them in March when my account has still been closed even when I did everything asked?

MattMattMattUK

They can close an account whenever they wish.

D3xt3r5L4b

Persistent debt. Card is frozen/cancelled so you cannot add to it. 

cymruchris

A lender can close any account with any customer as they wish - we don't have the right to a credit card with anyone. Although you've obviously worked towards reducing your debts, and are doing the right thing by focusing on your higher interest debts first, they've decided in the meantime that they no longer want your custom as you likely fall into their high risk category. They have no direct proof that you were doing what you were saying. I wouldn't worry too much about it - keep focusing on getting the debts down, and at a later stage when things in the world are hopefully a bit more settled, you'll be in a position to open a new account elsewhere when the time is right. 

lancstulip

Thank you for your comments! I do wonder whether they could still have closed my account if I’d taken a payment holiday. I’m still surprised that having been with this card issuer for over 30 years that they haven’t enough proof that I was doing what I was saying, especially since I haven’t defaulted on payments or ever taken a payment holiday. 

MattMattMattUK

lancstulip said:

I do wonder whether they could still have closed my account if I’d taken a payment holiday.

Yes they could have. Lenders were not required to offer/agree to payment holidays, especially in cases of persistent debt, for those with persistent debt whilst a payment holiday may offer a temporary reprice it actually makes the overall situation worse.

lancstulip said:

I’m still surprised that having been with this card issuer for over 30 years that they haven’t enough proof that I was doing what I was saying, especially since I haven’t defaulted on payments or ever taken a payment holiday. 

The having been with them for 30 years means nothing, it is the very low level of repayment that will firstly raise your risk rating in their systems and secondly trigger the persistent debt criteria, which means that they have to act.