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  • FIRST POST
    • mmm123
    • By mmm123 8th Jul 18, 6:01 PM
    • 2Posts
    • 0Thanks
    mmm123
    Minimum Payment Hike
    • #1
    • 8th Jul 18, 6:01 PM
    Minimum Payment Hike 8th Jul 18 at 6:01 PM
    I have had Lloyds credit card for a long time and have never missed a payment but they have just written to me and said that my minimum payment calculation is going up. What would have been a 400 minimum repayment will now be 620! Are they allowed to do that! Can they just change the rules so easily - it is going to be hard for me to find this extra money every month
Page 1
    • Chino
    • By Chino 8th Jul 18, 6:36 PM
    • 508 Posts
    • 261 Thanks
    Chino
    • #2
    • 8th Jul 18, 6:36 PM
    • #2
    • 8th Jul 18, 6:36 PM
    From the minimum repayment figures you quote, you presumably have an outstanding balance of at least 20,000.

    You need to calculate what monthly repayment you realistically can afford and contact your issuer.

    Also, perhaps close this thread and post on the Debt-Free Wannabe board for advice.
    • A4445
    • By A4445 8th Jul 18, 6:45 PM
    • 815 Posts
    • 369 Thanks
    A4445
    • #3
    • 8th Jul 18, 6:45 PM
    • #3
    • 8th Jul 18, 6:45 PM
    Ive had a letter from Lloyds saying if youve been paying the minimum payment for 18 months they would look to increase your payments to help you get out of persistent debt.

    They can also stop you from spending if they feel your over comitted. They are trying to help I guess.

    It doesnt really affect me as 90% of the time I pay in full. Id call them to see if they can come to an arrangement.
    • chattychappy
    • By chattychappy 9th Jul 18, 8:21 AM
    • 6,898 Posts
    • 3,755 Thanks
    chattychappy
    • #4
    • 9th Jul 18, 8:21 AM
    • #4
    • 9th Jul 18, 8:21 AM
    What would have been a 400 minimum repayment will now be 620! Are they allowed to do that! Can they just change the rules so easily - it is going to be hard for me to find this extra money every month
    Originally posted by mmm123
    It seems they can. I think it's wrong and unfair given this process wasn't in place when you ran up the debt. Somebody, such as you, shouldn't be put into a situation where a rule change pushes you into missing payments etc.

    Personally I think the same rules should apply as with interest hikes. You should be free to reject and continue on the existing basis.

    You could try complaining but I doubt you'll get anywhere because, supposedly, they'll be able to say that the change in underlying regulation is designed to "help" you.

    I!!!8217;d call them to see if they can come to an arrangement.
    Originally posted by A4445
    All very well, but that will likely be noted and mess up the OP's credit history.

    OP: is there anyway you can apply for a new card and shift the balance, ideally at a lower/0% interest rate?
    • molerat
    • By molerat 9th Jul 18, 9:26 AM
    • 19,304 Posts
    • 13,519 Thanks
    molerat
    • #5
    • 9th Jul 18, 9:26 AM
    • #5
    • 9th Jul 18, 9:26 AM
    All down to the new FCA rules to help those in persistent debt that has been talked about elsewhere here. If the bank do not take these measures they will be penalised. https://www.fca.org.uk/news/press-releases/new-credit-card-rules-introduced-fca
    https://www.helpforheroes.org.uk/give-support/donate-now/
    • dazzaofdagenham
    • By dazzaofdagenham 9th Jul 18, 9:38 AM
    • 1,213 Posts
    • 394 Thanks
    dazzaofdagenham
    • #6
    • 9th Jul 18, 9:38 AM
    • #6
    • 9th Jul 18, 9:38 AM
    So with customers paying less interest per year......where will they earn all there profits
    • zx81
    • By zx81 9th Jul 18, 9:41 AM
    • 18,571 Posts
    • 19,826 Thanks
    zx81
    • #7
    • 9th Jul 18, 9:41 AM
    • #7
    • 9th Jul 18, 9:41 AM
    From a lower default rate over time hopefully, and smaller sums being defaulted on.
    Last edited by zx81; 09-07-2018 at 9:44 AM.
    • Larac
    • By Larac 9th Jul 18, 9:57 AM
    • 845 Posts
    • 529 Thanks
    Larac
    • #8
    • 9th Jul 18, 9:57 AM
    • #8
    • 9th Jul 18, 9:57 AM
    Personally, I would be looking to see how I can get that debt down. All you need is a 'loss of earning' for whatever reason and you will be 'up the creek'. I am speaking from experience as ended up with a DMP (28K worth of CC debt). As a consequence interest rates are frozen and the debt starts to reduce. Unless you have some payment plan in place, this debt will go on forever. Its a bitter pill to swallow, but most likely your credit report is already shot to pieces with only paying minimum payments.
    • chattychappy
    • By chattychappy 9th Jul 18, 9:58 AM
    • 6,898 Posts
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    chattychappy
    • #9
    • 9th Jul 18, 9:58 AM
    • #9
    • 9th Jul 18, 9:58 AM
    As with previous regulatory changes, some CCs will take advantage by using them as an excuse to slip through changes that aren't actually required.
    • dazzaofdagenham
    • By dazzaofdagenham 9th Jul 18, 10:05 AM
    • 1,213 Posts
    • 394 Thanks
    dazzaofdagenham
    I have no idea of defaulting rates etc on credit cards. But if people are forced to pay more, then in the short term will this not push up defaults?

    From my own perspective......I was in credit card trouble about 6 years ago.......credit was and I think is still to easy to get and credit limits are increased far to soon and without check.

    For example....my aqua card has a increase twice in the last year and is now 4 times the original limit that I started with just over 14 months.

    Also my amazon card ( classic ) has a limit increase twice and been upgraded to the premium version with a limit of 5K from a initiL limit of 500 pounds.

    Now I!!!8217;ve learnt my lesson in relation to spending money I don!!!8217;t have, but as I say credit to far to easy to obtain and credit limts increased far far far to soon
    • zx81
    • By zx81 9th Jul 18, 10:09 AM
    • 18,571 Posts
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    zx81
    I have no idea of defaulting rates etc on credit cards. But if people are forced to pay more, then in the short term will this not push up defaults?
    Originally posted by dazzaofdagenham
    It certainly has the potential to. This is why lenders resisted the initial regulatory suggestions in 2010 that the min payments should be increased for the backbook, as payment shock would be too high.

    However, over time, for those who do not default, their repayment behaviour will improve and their indebtedness will come down. Defaults are largely a result of bad habits.

    Either way, minimum payments will only be going one way over the next few years, so it's something we'll all need to get used to.
    • dazzaofdagenham
    • By dazzaofdagenham 9th Jul 18, 10:24 AM
    • 1,213 Posts
    • 394 Thanks
    dazzaofdagenham
    It certainly has the potential to. This is why lenders resisted the initial regulatory suggestions in 2010 that the min payments should be increased for the backbook, as payment shock would be too high.

    However, over time, for those who do not default, their repayment behaviour will improve and their indebtedness will come down. Defaults are largely a result of bad habits.

    Agreed...if repayment behaviour means paying less interest over time then the credit card will need to look elsewhere for there profits ?

    Either way, minimum payments will only be going one way over the next few years, so it's something we'll all need to get used to.
    Originally posted by zx81
    Im not really affected by this as I owe very little in terms of credit, maybe 600 pounds.

    But the effect on others will maybe aff3xt us all
    • zx81
    • By zx81 9th Jul 18, 10:25 AM
    • 18,571 Posts
    • 19,826 Thanks
    zx81

    But the effect on others will maybe aff3xt us all
    Originally posted by dazzaofdagenham
    Absolutely. The one cast iron guarantee in lending is that the good guys pay for the bad.
    • dazzaofdagenham
    • By dazzaofdagenham 9th Jul 18, 10:31 AM
    • 1,213 Posts
    • 394 Thanks
    dazzaofdagenham
    And I seem to read in recent terms and conditions change that interest rates on credit cards ( newday ) will be linked to Bank of England base rate.

    And I!!!8217;m of the opinion that the base rate will be going up in the next fe years, coupled with this increase in min payments could push people over the edge....

    Not something this economy needs
    • molerat
    • By molerat 9th Jul 18, 10:39 AM
    • 19,304 Posts
    • 13,519 Thanks
    molerat
    As with previous regulatory changes, some CCs will take advantage by using them as an excuse to slip through changes that aren't actually required.
    Originally posted by chattychappy
    Under these new rules firms will be required to take a series of escalating steps to help customers who are making low repayments over a long period, beginning when the customer has been in persistent debt over 18 months. After this time firms need to contact customers prompting them to change their repayment and informing them their card may ultimately be suspended if they do not change their repayment pattern. Once a consumer has been in persistent debt for 36 months, their provider will have to offer them a way to repay their balance in a reasonable period.
    Not really much leeway in what they can do is there. Simply asking pretty please can you pay this off quicker is not going to work with the majority. The same as is happening with smart meters, the customer declines and the supplier gets a fine for not doing enough. The banks are screwed whatever they do.
    Last edited by molerat; 09-07-2018 at 10:45 AM.
    https://www.helpforheroes.org.uk/give-support/donate-now/
    • MEM62
    • By MEM62 9th Jul 18, 12:19 PM
    • 1,720 Posts
    • 1,324 Thanks
    MEM62
    What would have been a 400 minimum repayment will now be 620!
    Originally posted by mmm123
    it is going to be hard for me to find this extra money every month
    Originally posted by mmm123
    That suggests that, not only are you carrying a large amount of debt, but that your finances are also stretched. This is your wake up call. You need to look for ways to deal with this debt and reduce your level of borrowing before the slippery slope that you are on becomes unmanageable.

    The DFW boards will give you some great advice. Pop over and stick an SOA up.
    Last edited by MEM62; 09-07-2018 at 12:22 PM.
    • chattychappy
    • By chattychappy 10th Jul 18, 8:22 AM
    • 6,898 Posts
    • 3,755 Thanks
    chattychappy
    Not really much leeway in what they can do is there. Simply asking pretty please can you pay this off quicker is not going to work with the majority. The same as is happening with smart meters, the customer declines and the supplier gets a fine for not doing enough. The banks are screwed whatever they do.
    Originally posted by molerat
    Yep, true (the last sentence).

    My reading of the OP is that the minimum payment is being increased. Ie there will be fees and reports to CRAs if the new minimum is not paid. My reading of

    After this time firms need to contact customers prompting them to change their repayment and informing them their card may ultimately be suspended if they do not change their repayment pattern.
    Originally posted by molerat
    is that the requirement is to "prompt" them to change their repayments and threaten suspension if they don't. Also this is if the OP doesn't respond to earlier communication, hence "After this time.."

    Before writing my post, I did skim the regs themselves, as the PR spun version can sometimes be lacking. They are here: https://www.handbook.fca.org.uk/handbook/CONC.pdf (at 6.7.27 onwards).

    The gist is very much of communication, offering help, asking the borrower to increase payments over time.

    I think we would need to see any other documentation that the OP has received before making a judgment, but it doesn't seem to me that the lender is compliant with the new regs on the basis of the OP or can be honest if they are saying the regs require them increase the minimum.

    (I think compliance with the new regs isn't required until September.)
    Last edited by chattychappy; 10-07-2018 at 8:27 AM.
    • bigisi
    • By bigisi 10th Jul 18, 8:47 AM
    • 339 Posts
    • 606 Thanks
    bigisi
    OP's break in between their '2' posts - 11 years! They never came back to their last thread either. I suspect you're all wasting your time.
    • photome
    • By photome 10th Jul 18, 9:06 AM
    • 13,470 Posts
    • 8,985 Thanks
    photome
    OP hope you return and get things sorted, your last post was in 2007 , with similar question



    as suggested post on the DFWB
    • Nasqueron
    • By Nasqueron 10th Jul 18, 9:38 AM
    • 5,430 Posts
    • 3,346 Thanks
    Nasqueron
    My CC is with the Halifax and I received a letter yesterday saying they were changing the Ts & Cs to allow them to recommend you increase the minimum if they feel you aren't paying it off / paying more in interest than clearing debt. I think I will probably close it as the "loyalty bonus" which used to be 0.25% cashback I now see they round down to the nearest 5
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