Thursday, 24 February 2011
Dealing with Debt
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!