Should I continue paying my HSBC credit card

saul1664

In 2002, as part of a student package, I got a gold credit card. Everything was fine until I missed one payment, despite me offering to pay them what was on the statement, they closed the account so the card couldn't be used and wouldn't reopen it even with good payment history.

Instead they accepted £80 a month, but kept the account open, so they were charging the requisite interest as if the card was active. This has increased to £85.

What I need to know is am I doing the right thing paying for a card that is virtually dead. Are they within rights keeping the account open and charging interest although they say I cannot use the card (which has long expired now anyway). Surely if the card is closed they shouldn't be keeping the account open and charging interest. What is my best option on this.

At the time when I mentioned I didn't want to go into this agreement with them it was either that or immediate legal action and the possible closing of my bank account and overdraft as well. At this rate, it's going to take years and years to pay off with no benefits (which I guess is the point).

Saul

darcyvuqua

im not sure they can charge interest on a closed account is it definatly closed?

CLAPTON

you seeem to want to spend more on the card (i.e. keep it open) but can't pay the existing debt after 6 years.... a bit confused here about what exactly you are saying.

ShelfStacker_3

Erm... you spent all the money up to the balance... why should you NOT pay it back?

saul1664

ShelfStacker wrote: »

Erm... you spent all the money up to the balance... why should you NOT pay it back?

No, I am not disputing the amount or actually paying it off, just the validity of paying high interest charges etc on an account that cannot be used, yet remains open for the purpose of paying it off and getting the most money out of me as possible, and was looking for other solutions to payment rather than lose every £60 out of every £85 I pay?

saul1664

ShelfStacker wrote: »

Erm... you spent all the money up to the balance... why should you NOT pay it back?

Not disputing the amount or the need to pay it back, just the validity of paying back a large credit card amount on an account that is ostentiably closed, therefore should they actually be charging interest and charges on an account that can't actually be used. They currently take £60 interest and charges out of each £85 monthly payment so was looking at more effective ways of clearing this debt.

danny69

You have borrowed the money, yes? They have obviously decided that they dont want to let you borrow more money on the card because you missed one payment. It is upto you if you think that is fair or not, but it isnt really their problem. You have paid back £80 or so a month for a number of years, which suggests you have borrowed a few thousand pounds. I get the impression you want to know why they are charging you interest on the money. When you borrow money on the card, you pay interest on your payments. You could rearrange this and get a fixed ratesecured loan and pay off the full balance if you wished, but the bank has every right to charge interest on money that was borrowed via a credit card. Some people expect to be let off and think they have been treatged unfairly when clearly it is not the case!

danny69

saul1664 wrote: »

Not disputing the amount or the need to pay it back, just the validity of paying back a large credit card amount on an account that is ostentiably closed, therefore should they actually be charging interest and charges on an account that can't actually be used. They currently take £60 interest and charges out of each £85 monthly payment so was looking at more effective ways of clearing this debt.

Ah, sorry for that post. it is simple to do this - pay more each month to bring the outstanding balance down. Could I ask how much is owed on the account?

dmg24

If your credit record is now good (how is the HSBC account recorded on there?), you could transfer the amount to a 0% balance transfer card. However, I'm thinking that it will not be that good if the arrangement with HSBC is on there x

saul1664

danny69 wrote: »

Ah, sorry for that post. it is simple to do this - pay more each month to bring the outstanding balance down. Could I ask how much is owed on the account?

I think there is about £3200, which you can imagine is not going down very fast. I can't afford to pay any more at present on this account.

danny69

Well if you couldnt afford to pay the money back then you shouldnt really have borrowed it in the first place. I think all you can do is take out a cheaper loan to pay it all off in one go. That way you will know exactly how much you are paying and how long it will take to pay it off. What you need to remember in the future is that if you borrow money then it must be paid back some time. Making small repayments like this will barely cover the interest, as you have found out to your cost.