Thursday, 24 February 2011

Dealing with Debt

My current account, into which my meagre pension is paid, is with the same bank that provides my credit card.  A bank that has had my custom for almost 30 years.  

I've never been overdrawn...OK I've cut it a bit fine in the last couple of years and often been down to a couple of pence..but I've never gone into the red.  I have an overdraft facility but I pride myself on never having  used it.   I only have one direct debit which pays my credit card...I've never defaulted..it's always been paid on time.  And as you will see from my last post, this is now the minimum payment which has got me into a vicious circle.   My credit limit is too high. It bears no relation to my income.  Out of necessity I've had to use my credit card each month....the minimum payment increases...most of my pension pays it...so I have to use the card again...and so on and so on.  Like I said...it's a vicious circle.

I've listened to my followers and taken advice.  I emailed the bank asking them to reduce the interest rate.  They said no.  I emailed them again asking why they give such favourable rates to new customers, but fail to help their existing longstanding ones.  They suggested I call their customer service department.  So I did this morning.

So I explain my situation and the guy immediately says they cannot reduce the interest rates.  He asks me if I am in financial difficulties.  I am honest...I say I am because I am determined to continue to pay off my debt each month, but because the minimum payment is so high I have to keep using my credit card to subsidise my outgoings. 

So helpful guy that he is, what does he do?   He says...OK we have now blocked your credit card!   So I ask him "If you cannot reduce the interest rate and you have now blocked my credit card, how do you think this helps me?"   He replies that he has to do this as a "responsible lender" and that there is nothing further that he can do to "help".   So I then tell him that far from this being helpful, it will probably result in my being unable to pay the minimum payment at all in the very near future.   Talk about cutting off noses to spite faces!

Up until this point I had remained pretty calm but then I got angry.   I reminded him of my 30 years custom, of how my accounts have been managed very well until recently, and because I had decided to contact them BEFORE I reached a point where I couldn't pay my monthly debt in full, they had now slammed the door in my face.   AND...I said OK what am I to do?   Stop paying?  Disappear into the depths of this huge country and forget about the debt?  I said I am trying to be honest...to do the honourable thing...to continue to take responsibility for the debt that I have incurred, and all I am asking for is a little help at a financially difficult time in my life.

Finally, I said that I would continue to endeavour to pay the monthly minimum payment but that I was warning him that this may not be possible in the near future, but there's very little I can do about it if there just is not enough money available.

He went quiet...he said hold on...I did.  I was put on hold, and forced to listen to jolly music which made me want to scream!

He returned.  He said he couldn't unblock the card...once it's done that's it.  However he has reduced my monthly payment by 45 pounds for a period of 4 months.  This has to reach the credit card account on time or the arrangement will be cancelled.  They will review the situation again at the end of the 4 months.

On reflection it's just as well my card is blocked...I really don't want to keep using it...I never did.

It isn't much...but it's better than nothing.  I am very disappointed though, and I hate myself for even thinking that in future I will think twice about being so honest.   Does honesty pay?  It doesn't seem so!

17 comments:

  1. This is a disgrace, Ayak, made worse by the guff about being a responsible lender!

    Isn't there a financial help column in The Telegraph? You need someone with clout to make a fuss.

    Yes, it does make you wonder about being honest...when the whole of the financial sector seems to work on lies and half truths.

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  2. Oh Ayak I don't know how you remain so calm. What a load of
    *!@*ers.
    Him Outdoors said yesterday that Lloyds Bank had 300,000 complaints in the last 6 months of last year and you can quite understand why!!
    It doesn't help much but we are very much on your side and thinking of you.

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  3. Fly: Well I'm of that generation where the mantra was "honesty is the best policy". It doesn't seem to apply anymore. I need to get further advice, it's true, but I'm still so angry!

    Rosie: I'm really not calm. I've been in tears on and off today...tears of frustration.
    And it does help for you to say you're on my side..it helps a lot...thankyou.

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  4. I'm so sorry, Ayak, about this whole banking/credit card business. It seems it doesn't matter anymore how long you've been a customer; that no longer has any bearing on how you're treated. And banks' current ideas about so-called "responsible lending" are just nuts. The credit limit on our credit card goes up about every six months, even though we don't use it. The reason we don't use it is because they refuse to lower the interest rate from 30%, which is just ridiculous. I'd love to cancel it but I'm afraid what that would do to our credit score. So difficult!

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  5. This is appalling, Ayak! Here you are, trying to be honest and responsable, and you get virtually no response when you approach them for help. And to think that the government helped out many of these dreadful institutions when they couldn't pay their debts! Arrggh! Wish I could help.

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  6. Barbara: The comment about "responsible lending" really got to me, said in the same breath as having blocked my card. They really don't care about their customers.

    P in T: It doesn't seem to be worth being honest or trying to be responsible..People like me are insignificant as far as the banks are concerned.

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  7. This must be a European thing because I have never heard of them blocking a card when the person is responisible and pays their debts. Most U.S. credit card companies are willing to reduce the interest rates in order to keep their customers from leaving them or from not being able to pay their debts. The only part is here in the states if you do not pay they get really nasty and call non stop. Thankfully, we have always been able to pay our bills on time. Maybe it is a blessing.

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  8. Kelleyn. I don't know if this is normal practise (to block a card) and I'm still shocked that he did this at this point in time. I could understand it happening if I missed payments, but I haven't. If I had just given up at this stage in the conversation I would clearly have not received the reduction for 4 months.

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  9. I am so stunned by this. Honestly, honesty doesn't seem to pay anymore. I'm so angry for you. Is this an English bank? I loathe the banking system here - it's anti-clientele and pro-bank. This seriously boils my blood. I'd say call back and fight again but I'm afraid they'll demand a pound of flesh for payment. I feel awful for even suggesting you contact them at all.

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  10. 'Cross the Pond: Yep it's an English bank..and I have been with them for years...before I moved to Turkey. I've never asked for their help before...ever...and I doubt I'll do it again! But don't feel bad about suggesting it, I would probably have done so anyway.

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  11. is there any chance of you doing a balance transfer to another card? If you apply for a new card with someone else and then do a balance transfer from your old card to theirs they will often give you 12 months interest free on the balance transferred? Just a thought.

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  12. Kelloggsville: Yes that had occurred to me. However, another card provider would probably not give me a card or accept a balance transfer of that amount, because my incomings(pension) is too low. The only reason why I have such a high credit limit on my existing card is because I first had it years ago when I was in full-time employment. Of course since then, the card provider has continued to increase the credit limit without even asking me. Hence the reason I'm annoyed at the comment "responsible lender"!!

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  13. I am very dismayed to read this. I don't think that longstanding customers get good treatment. Quite the reverse I would say. I have found that my own bank is not very good and we have been customers for years.
    Does it pay to be honest? Obviously not.
    I don't like credit anyway..... but then maybe I am not in as much dire need. However, no one knows what is round the corner.
    I get annoyed about the way pensioners get treated and some who are trying to live off savings are hardly getting any interest back and yet if they get into the credit spiral they have to pay massive interest. Why is that?
    maggie X

    Nuts in May

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  14. Maggie: Life does seem unfair at times. It seems that those in desperate need (not talking about myself necessarily) don't seem to get any help when they need it. I could argue another point..after 30 years of NI contributions in England, but because I live here, I am not entitled to any NH treatment. I accept that because it was my decision to emigrate, but I know so many expats who haven't been totally honest about living here permanently and do return to the UK for treatment.
    Like I said before it doesn't seem to pay to be honest...hmmm 30 years wasted contributions!

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  15. Sorry to hear about it all Ayak what a bloody mess ... but u note the bankers here are mostly still getting their big bonuses hmmmmm anyway love to u xx

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  16. Oh, what an awful story! I'm sorry to hear they're treating you so shabbily. It's a shame that it's harder to do with banks - a lot of people here move back and forth between the 4 or 5 mobile phone companies. They cancel their contracts, start with another provider, and then the original provider starts calling and offering them better deals. If many of us were able to switch our banking that easily, the big banks would be forced to do the same.

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  17. Bomb: Thankyou...yes no wonder bankers do so well!

    Deniz: Yes it would be good if it was possible to do the same with the banks.

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