Credit Card Problem

BOOKWORM.1

My daughter received a telephone call this morning from one of the banks she has a credit card with. They said if she does not issue a payment or return their calls they will send a collections person to her home. She is three months behind in payments due to a significant salary reduction. Does anybody know if it is possible to obtain a moratorium on a credit card? She has plans on calling them first thing in the morning so any advise on her rights would be more than welcome.

Twixster

I'm sorry but she doesn't have any rights here. She is 3 months behind in payments so they are well within their rights to be demanding. I don't think she should be waiting untill the morning to ring them, she should ring them RIGHT NOW and get this sorted. She's probably ruined her credit rating so that's why should be ringing them as soon as possible and come to some sort of agreement with them.

CSC

It's always better to contact your credit card provider if you are having difficulty paying. There are numerous things they can do to help e.g freezing interest for a couple of months, various arrangements. The last thing they want is to write the debt off as they lose a considerable amount of money if they do.

lucky-colm

what bank is it?
how did she acquire the card?(did they approach her/was it over the phone)
how much does she owe on the card?
what is her overdue payment?

really regardless of salary cuts you cannot ignore the repayments it really is easy to make the minimum payment or if not the int at least.

missing payments on cards is crazy first the hit you with late payment fees and secondly they raise the interest rate for overdue payments aswell as paying interest on interest.

if it is from one of the instutions covered by the bank gaurantee scheme there is a moritorium for late payments on private loans, mortages,and credit cards.

she should also consider getting a bank loan to repay the credit card and stretch out her repayments making it easier to repay not to mention the vast difference in the interest rate.

if none of the above two options are achievable to her she could consider telling them to fcuk off it is an unsecured loan. but this method will fcuk up her credit rating and probably end up in court.

BOOKWORM.1

Unfortunately this bank is one of the ones who opted out of the scheme.
I got her to ring them immediately and they are accepting minimum payment once it is paid first thing tomorrow.
The amount of credit made available on the card was large as she was earning a massive salary at the time.
Money is overly tight at the moment so a personal loan is worth looking into.
Colm. no she approached them. The credit on the card is 20K (I think). That is the amount outstanding.

Jet Black

With her oweing that amount if she start's paying the minimum every month she will be only be paying the interest off that card. If she only has the ability to be paying off the minimum it would work out a lot cheaper if she got a loan.

The only problem is now she is 3 payments behind and its going to show up on the icb. It will definitly not bode well when the bank review the loan application.

If she did manage to get a loan I would strongly recommend that she cancels the credit card so this does not happen again.

djk1000

Are either of you a member of a credit union? If you are, you could try for a loan from there.

I'd also suggest that she sits down and does a budget. I might be generalising here, but if she has run up a credit card balance of 20k, then even on her higher salary she was living beyond her means.

If you both work on a budget detailing all the outgoings in a month, you might be surprised at how much is going on non-essentials. Does she have other borrowings? If so, they could be re-negotiated to reduce payments (this will mean paying back more in the long run).

A detailed personal financial statement (income, spending, assets, liabilities) is something the credit card company will look for before they entertain any solution proposed by you.


You can also go to www.mabs.ie for free impartial advice.

If you can't get your hands on all the money for this debt, you can sometimes negotiate a lower amount as full and final settlement of the debt, however, this will probably do devastating damage to a credit rating, it's always better to pay back the full amount.

Some important points,
1. cut up the credit card and any others she may have.
2. NEVER delay in responding to the company, never ignore a message or letter, always reply even if it is just to acknowledge receipt.
3. Given the size of the debt, you should be able to get passed the call centre types and find someone in the credit card company that can deal with your case and make decisions. Ask for this, you've nothing to lose.
4. Ask the credit card company in writing for a moratorium on interest and penalties while you assess the situation.

Don't be worried about being taken to court, in the unlikely event of this happening, the worst that can happen is that you'll have to make payments based on ability to repay, you may however be lumbered with court costs and there are very serious legal repercussions if you don't stick to an agreement made in court and again, the credit rating will be destroyed for a long time. ( I think about 6 years after the debt is repaid in full! I stand to be corrected on that though)

As for doorstep collectors, they won't call once you keep an open line of communication with the credit card company. If they do call, don't deal with them, don't hand over money and don't let them in, they have no rights and no authority.

BOOKWORM.1

Guys, thanks for all your advise. It feels a lot better to get an outside perspective on things.

Djk, she was terrified that these guys would land at her door and wasn't sure how to handle the situation if that occurred. When she applied for the card she signed something that allowed them the right to arrive at her home or work so she's worried sick that will happen but I have warned her not to let these people in.

The card has since been cut up but funnily enough; through out all this bedlam not once have the bank threatened to cancel the card in question.

So I'm guessing if she hadn't destroyed the card and paid some money off then she would be allowed run up another bill:rolleyes:

lucky-colm

with that kind of borrowing she really should consider approaching a bank for a personal loan over 5yrs it would cost roughly €400 per mth. if they don't give her a loan due to the late payment on her card the credit union are very helpfull in these matters even if you don't have an account with them they are still very approachable allbeit the interest rate is slightly higher than the bank but not anywhere near as high as the credit card company. if any ye havn't an a/c with the credit union they may ask ye to save a set amt for 3/4mths before allowing ye to apply for a loan but a meeting with the manager would be your first port of call and he will let you know what to do.

good luck