Persistent debt

Ergates

Chris_English said:

molerat said:

Chris_English said:

If you are already paying the minimum payment as per your then what reason have they given you for asking you to pay more?

Are you sure there are no arrears or missed / short payments?

Simply because of the persistent debt rules.

Yes, that’ll be why they are asking, but that doesn’t allow the company to override the original contract; the customer still has the right to continue paying as per the deal that they signed up to.

The card company may then stop additional spending, but they can’t insist on more than the contractual minimum being paid 

OP hasn't entered into a payment plan on the Barclaycard.  Raising the minimum payment is one of the main ways the credit card providers deal with customers who are in Persistent Debt, so they very much *can* do it.

Chris_English

Ergates said:

Chris_English said:

molerat said:

Chris_English said:

If you are already paying the minimum payment as per your then what reason have they given you for asking you to pay more?

Are you sure there are no arrears or missed / short payments?

Simply because of the persistent debt rules.

Yes, that’ll be why they are asking, but that doesn’t allow the company to override the original contract; the customer still has the right to continue paying as per the deal that they signed up to.

The card company may then stop additional spending, but they can’t insist on more than the contractual minimum being paid 

OP hasn't entered into a payment plan on the Barclaycard.  Raising the minimum payment is one of the main ways the credit card providers deal with customers who are in Persistent Debt, so they very much *can* do it.

No, they can't. They can say that if the customer wants to keep spending on the card then they will increase the minimum, but the customer can decline the offer, and continue to pay the contracted amounts.

Thrugelmir

Address your current issues fully first. Application for a mortgage may need to be parked for a period. At least until your credit history is rebuilt. 

sourcrates

jamaicainn said:

I have been paying off a large amount on credit cards following separation from my long term partner. I have not missed any payments but as I was making minimum payments I was being persued to make persistent debt arrangements. Most of them are having no interest added abd I am just paying them off. I kept my Barclaycard “live” as I wanted one card for purchase protection ( not that I can afford to buy much) . They are now on my case to make an arrangement. Unfortunately I missed the letters as I was paying by DD and forgot to change my address when I had to leave my home. The options are pay off in full (impossible) pay the increased amount of another £100 a month (impossible) or make a payment arrangement to pay off but they won’t freeze the interest and this will affect my credit file and I need to apply for another mortgage next year . I have been trying to improve credit score which is now fair and almost good. Which is the best way to tackle this . I feel it’s very unfair as I have never missed a payment.

You also have the option of defaulting on your agreement, which is not the ideal choice, but one that ticks the most boxes here.

A mortgage with bad credit, is not impossible when using a good broker.

The persistent debt rules were supposed to stop those only making minimum repayments every month, from accruing unaffordable debt, however the banks have interpreted the rules in a way that is leaving many people in impossible situations.

MalMonroe

Hi, I'd suggest contacting one of the free debt help agencies, see the end of sourcrates' signature for links. As always, some good advice from sourcrates and born_again. 

The old saying, 'a problem shared is a problem halved' is certainly true where debt is concerned. I know these things, I had a DRO some years ago, arranged by a lovely agent at StepChange. Just knowing that you do have options is very helpful, in my experience. 

born_again

sourcrates said:

The persistent debt rules were supposed to stop those only making minimum repayments every month, from accruing unaffordable debt, however the banks have interpreted the rules in a way that is leaving many people in impossible situations.

Sadly the FCA do not think these out properly. Which really do defeat the way many people use a credit card. YES, it's not good over the amount of interest people have to pay back. But they have borrowed the money and spent it. Then that is the way a CC works with revolving credit.

End of the day the FCA lumbered card providers with a short stick. 
Either they stop the cards from being used or ask for larger payments. Both leave people in this impossible situation. Often the only way is default.

Ergates

born_again said:

sourcrates said:

The persistent debt rules were supposed to stop those only making minimum repayments every month, from accruing unaffordable debt, however the banks have interpreted the rules in a way that is leaving many people in impossible situations.

Sadly the FCA do not think these out properly. Which really do defeat the way many people use a credit card. YES, it's not good over the amount of interest people have to pay back. But they have borrowed the money and spent it. Then that is the way a CC works with revolving credit.

End of the day the FCA lumbered card providers with a short stick. 
Either they stop the cards from being used or ask for larger payments. Both leave people in this impossible situation. Often the only way is default.

Even stopping payments doesn't really fix the underlying issue - paying back only the minimum amount on a credit card debt means it can take decades to clear.

born_again

Quite right. 
But at least it means it gets paid back faster, thus incurring less interest..