Are credit cards repayable on demand?

itsgototstop

After Egg today I just wondered?.

I know BT deals aren't because you have paid a fee for a certain amount of time at 0% but just wondered about normal cards with no 0% deal on them?.

Balls_Of_Steel

itsgototstop wrote: »

After Egg today I just wondered?.

I know BT deals aren't because you have paid a fee for a certain amount of time at 0% but just wondered about normal cards with no 0% deal on them?.

Interesting question, have no clue to the answer...unless i read a whole page of T&C's from their web site. But, overdrafts are repayable on demand.

daveboy

Whilst I also don't know the answer, it may well depend on each cards terms and conditions unless there is anything in the Consumer Credit Act on it, overdrafts usually run into the hundreds, or possibly between £1k and £2k (I don't need a wise guy to say they have something twice that thank you as you will be in the minority compared to most people).

Credit cards if they are carrying a balance can have an awful lot more and lenders know that if they issued a 'pay us back now' demand that all they would end up doing is forcing a lot of people into a situation where they would struggle, possibly end up in court or seeking the help of organisations such as the CCCS. All that would do is damage their image and cost them future customers - hence why Egg is letting people pay it back over time....although the whole issue has backfired on Egg.....I think that will be the biggest own goal by any company in 2008.

My opinion is that they can't be repayable on demand as there would be a lot of nervous people out there worrying every time the postman put something through the door....something like that would tip the scales the wrong way for an awfully large number of people.

itsgototstop

Thanks for that, slightly worrying if they are but I can't see anything in T and C

wyebird

I think only if the account is marked as defaulted i.e. you have broken the terms and conditions would they say the whole amount would become payable within a certain period to avoid the default being applied.
Otherwise they may withdraw the card ( as with egg) and let you continue to pay off the balance.

dag_2

Like wyebird says. I think that if you go over limit, then the amount by which you have exceeded the limit becomes repayable on demand. But what they can't do is cut your limit to less than your outstanding amount.

Well - no, actually they can cut your limit to anything they want, right down to zero (like Egg are planning to do with a few hundred thousand people), but it does not mean that you have to pay back the balance you had before the limit cut any earlier.

Not sure what happens when you miss minimum payments though. But I'd be very surprised if missing just one minimum payment makes the entire balance repayable on demand. What happens if you miss the payment one month, and then they slap the charge on, and then you pay again okay in the following month? Does this mean that they have waived their right to demand full and immediate settlement, assuming they had such a right in the first place?

What if you have maintained your account properly for several years, but there was one minimum payment you forgot several years ago before you set up your direct debit? Can they bring this skeleton out of the closet to nail you for the entire balance on demand? I suspect the answer to that one is no, but I'm not sure.

I'm guessing here, but I dare say that how it works is that if you miss three or four minimum payments in a row, then they're able to apply to the courts to get judgement against you. But I suspect they're only able to get judgement against you in the total of the amounts of the minimum payments that you have missed, and not for the full balance.

They may well be able to add charges to your account for non payment, but these charges themselves are not payable on demand either, and are only added to your account for you to pay later. And they can't enforce them against you until after you have become due to pay them.

I don't know, though, I'm only guessing. Anyone who is really worried about this should ask at the Citizens Advice Bureau, but I'd be interested to find out what they say.

itsgototstop

Terrible article but does say they are not

http://soscreditservices.com/documents/Introduction.pdf

Bismarck

Holy cow.

Where did you dredge that up from?

Had a look at some T&Cs and the problem I see is that they can give you a hard push by changing the T&Cs so it hurts too much to not pay it off. T&Cs are not set in stone unfortunately.

itsgototstop

Had a look at a few T and C's, I think they can freeze card but you are allowed to carry on repaying at minimum rate or over.

Currently paying off last credit card and after Egg, I thought what if they are, I would be """"""ed

dag_2

I've had a bit of a search around, and I've changed my mind.

Unsurprisingly, there are a lot of rumours floating around about what does and doesn't happen if you miss a payment. Try sticking search terms like "credit card" and "default" and "what happens" into Google, and you'll find loads of links to forums not unlike this one, where people say ominous things like "bad things happen", and "they screw up your credit record" and "you know, you really ought to get a better paying job", or "don't let it happen in the first place". Well, yeah, duh!

However, it seems that if you do miss a payment, then your account may go into what is known as "default". Yes this does mean that you lose the right to defer payments, and it does mean that the bank can enter judgement against you some time later on, for the full balance, if you still don't pay.

But you don't lose all of your rights just like that. There are certain minimum legal timescales that apply, and you do get an opportunity to submit a defence, for example, if you dispute charges on your account. But admittedly I'm not sure exactly what those timescales are.

In practice, though, banks rarely go all guns blazing if your payment is late by only a few days. But if your account has ever been in "default" in the past, does there ever come a time when it ceases to be in "default", meaning that you formally regain the right to defer payments that you had previously lost? The answer to this one is still not clear.

However, I think we can be quite sure that if you've never ever missed a minimum payment on your account, and never gone over the credit limit, then, no, your account is not repayable on demand.

And even if you have gone over the limit, I suspect your account is still not repayable on demand, as long as minimum payments are maintained. Missing a payment might make your account go into default, but going over the limit by itself seems not to.

itsgototstop

Thanks never gone over limit, pay minimum by DD and then pay additionally by internet banking.

Just paranoid