Cards Q&A

Q. I am struggling to pay off my credit card debts

Answer.

I am struggling to pay off credit card debts of £23,000 which are accumulating interest every month. I have tried paying off the minimum but as there are multiple cards, I am now struggling to even meet these repayments. I am now unemployed and desperate for help. What can I do?


Our debt expert says: Thousands of people are struggling with debt in the UK, which has got worse since the recession, where redundancy and unemployment has seen a large increase of debt-related problems. Contact a regulated debt management company who will explain the best debt options and solutions for you. They may be able to arrange a debt management plan, an Individual Voluntary Arrangement or even bankruptcy so you can look forward to a debt free future. However serious your debts are, there will be a solution, so contact a specialist company as soon as you can to put your mind at rest.

Q. where do i stand with bank card refund

Answer.

My bank card was stolen from my bag when I was enjoying a night out with friends. Within two hours of the card being stolen, it had been used to withdraw cash and also to pay for petrol at a motorway service station. I contacted my bank who said it was my fault and refused to refund the money. What can I do?
My bank card was stolen from my bag in a bar in Soho where I was at my own farewell party before starting a new job. Within a couple of hours, the thief had made cash withdrawals and used the card at a petrol station.

Our credit card expert says: The reason your bank refused to repay the money was probably because they assumed you were careless in the first place, which resulted in your card being stolen. If you used the card in a pub, you were most likely watched and your PIN would have been noted. The same person then probably took your purse containing your card in order to use it for cash and fuel. Unfortunately, most banks will claim that the victim has been careless if their PIN has been used to withdraw cash or pay for goods. Always make sure in future you are not being watched when you input your PIN number in a cash machine.

Q. I am struggling to pay off my credit card debts

Answer.

I am struggling to pay off credit card debts of £23,000 which are accumulating interest every month. I have tried paying off the minimum but as there are multiple cards, I am now struggling to even meet these repayments. I am now unemployed and desperate for help. What can I do?

Our debt expert says: Thousands of people are struggling with debt in the UK, which has got worse since the recession, where redundancy and unemployment has seen a large increase of debt-related problems. Contact a regulated debt management company who will explain the best debt options and solutions for you. They may be able to arrange a debt management plan, an Individual Voluntary Arrangement or even bankruptcy so you can look forward to a debt free future. However serious your debts are, there will be a solution, so contact a specialist company as soon as you can to put your mind at rest.

Q. Where do I stand with a bank card refund?

Answer.

My bank card was stolen from my bag when I was enjoying a night out with friends. Within two hours of the card being stolen, it had been used to withdraw cash and also to pay for petrol at a motorway service station. I contacted my bank who said it was my fault and refused to refund the money. What can I do?
My bank card was stolen from my bag in a bar in Soho where I was at my own farewell party before starting a new job. Within a couple of hours, the thief had made cash withdrawals and used the card at a petrol station.

Our credit card expert says: The reason your bank refused to repay the money was probably because they assumed you were careless in the first place, which resulted in your card being stolen. If you used the card in a pub, you were most likely watched and your PIN would have been noted. The same person then probably took your purse containing your card in order to use it for cash and fuel. Unfortunately, most banks will claim that the victim has been careless if their PIN has been used to withdraw cash or pay for goods. Always make sure in future you are not being watched when you input your PIN number in a cash machine.

Q. What has happened to my credit card payments?

Answer.

Over a year ago, I set up a direct debit from my bank account to pay my credit card bill with another bank. Money was taken from my current account each month, but instead of paying off my card bill, it sat in a holding account as the direct debit was set up incorrectly. My bank admitted the mistake and agreed to pay the late payment fees, but the mistakes have still continued. I have faxed account details and copies of my statements which they say they have never received. I am still being chased for late payment fees and my credit card limit has now been cut from £2,000 to £500.

John Kellsy, Swindon

Our credit expert replies: Your bank should write to your credit card provider and explain that the late payments were not your fault. If you have already cleared the balance and cancelled the credit card, it will be difficult for your bank to find out how the problem occurred, even though they should have resolved the matter earlier. Make an official complaint to the bank and they should reimburse any late payment charges and possibly send you a goodwill gesture.

Q. Is there a way out for credit card debt?

Answer.

I can´t cope with my credit card debts any longer as I owe over £15,000 on two cards. I am only paying off the interest but I am still struggling to cope. What can I do?

Our money expert replies: You need to write to your creditors and offer to make a reduced payment. Explain your situation and tell them there is no way you can continue with the current payments, and what can they do to help you. Compare the interest rates for a personal loan or a debt consolidation loan, as it may be worthwhile you taking out a loan to clear your credit card debts. Make sure you understand the terms and conditions in any loan agreement, as, for example if you take out a debt consolidation loan and then fail to keep up repayments, you could have your house repossessed. If your creditors cannot help you, work out a budget of your income and monthly expenditure and contact a regulated debt management company in the UK who will give you free help and advice about a debt management plan and other debt solutions.

Q. How can I clear my credit card debts?

Answer.

I am desperate to clear some of my credit card debts but the high interest rates are crippling me. What is the best way to go about it?

Geoff Johnson, Surrey

Our credit expert replies:  Try to transfer the balance of your card/cards to a 0% balance transfer card or consider a debt consolidation loan. If you apply for a 0% balance transfer card, you could save a lot of money in the long run by switching providers every time the 0% time limit runs out (which is normally every 6-9 months). A personal loan may also offer you cheaper monthly repayments and better interest rates than your credit cards are offering, but seek professional advice from a regulated debt management company before accepting a debt consolidation loan. These can work for some people, but remember they are secured loans, which means you could lose your property if you fail to keep up the monthly repayments.

Q. How can I arrange to pay less on my credit cards?

Answer.

My husband was made redundant last year, and we have run up huge debts in the meantime. We arranged with our bank to pay less off our credit cards over six months, but they now say the monthly amounts have doubled to cover the arrears, and we can no longer afford to pay them. What can we do to clear our debts?

Rachel Twells, Oxford

Our debt expert replies: You need to contact the credit card providers and explain your situation in writing. By doing this you are showing willing to pay, but asking for a more affordable reduced rate. If you are not satisfied with the outcome, contact a regulated debt management company who can contact your creditors on your behalf and arrange a debt management plan.

Q. Why can´t I get credit?

Answer.

I want to transfer £12,000 from my current credit card to one with a 0% balance transfer. I have been refused twice, although my credit rating is good. I have only applied for two cards in the past 3 months so why does my application keep being declined?

Vince Colman, West Yorks

Our financial expert replies: The most likely reason you keep getting refused is because the recent recession and credit crunch have meant credit card providers are being a lot stricter about who they give credit cards to. Reports state that one major card provide has turned down up to 50% of all applications for cards, and some firms are declining even more. If you have any outstanding debts or you have a new job with a lower income, this could also be an issue.

Q. I can´t cope with my credit card debts. What can I do?

Answer.

I owe £10,000 on credit cards and don´t know which way to turn. I can no longer afford the minimum payments, and although I have applied for loans, the interest rates would leave me worse off. What can I do?

M. Miller, Daventry

Our consumer credit specialist replies:  You can probably find a solution to your debt problems without borrowing more money, which will make things worse. Remember a debt consolidation loan is a secured loan which could result in you losing your home if payments are not kept up, so consider a debt management plan or an individual voluntary arrangement (IVA) which could reduce your monthly payments and leave you debt free in just a few years. Contact a regulated debt management company who can give you free and impartial advice about debt options. They can also contact your creditors on your behalf to arrange an affordable payment plan for you.

Q. Will it pay to purchase a new bathroom on a credit card?

Answer.

I want to buy a new bathroom and pay for it on my Mastercard so I get purchase protection. The credit limit cannot be raised to cover the cost but I intend to put enough cash onto it to cover the cost of the bathroom. Is this a good way to go about it, and would I get the same protection by using a debit card?

Barry Brunton, Cardiff

Our credit card advisor replies:  You can build up a credit balance on your credit card, but you would need to speak to your bank directly to see if they will allow it. Once a customer puts a card into credit by a large amount of money, the funds may not be protected by bank insurance. If the card was stolen or copied and funds withdrawn, the bank may not guarantee repaying the money. A debit card normally offers the same level of protection as a credit card, in terms of non-receipt of goods or services, so check with your bank if this is a viable option.

Q. How can my brother get his money back?

Answer.

My brother has been struggling to resolve problems with his credit card provider for 18 months. His standing order payments were returned as he was given the wrong account number to start with. He was then charged for late payment plus interest, although none of this was his fault. The initial charge was refunded to him but not the interest charges, which have resulted in a default on his credit report. How can he get his money back and get his credit report amended?

Julie Flores, Manchester

Our credit expert replies: Your brother´s credit limit should be restored to a higher level and the interest payment should be refunded immediately.   He should contact the credit reference agency who will adjust the credit report, but if the bank/credit card provider refuses to help, send a strong letter of complaint and outline the mistakes they have made. If you are still not satisfied, contact the Citizen´s Advice Bureau for free help and advice.

Q. How do I cancel a late payment charge?

Answer.

Although my credit card payment was not due until the end of the month, I paid it two week early as I was going away on holiday. The credit card provider then said they were adding a late payment charge to my account as the payment had not been made. I have sent them a letter and my receipt of payment, but they continue to send statements showing money owing plan a late payment fee. How can I resolve this as the payment was definitely made in plenty of time?

Carl Coxton, Cumbria

Our consumer credit expert replies:  Your payment would appear to have gone missing from the time you paid it in to the time the statement including late payment was sent. This is the responsibility of your credit card provider, so send an official letter of complaint with a photocopy of the receipt of payment, and insist they speak to their bank for the missing payment.

Q. How can I get my money back?

Answer.

A credit reference company has debited my Visa credit card twice in the past three months without my permission. I have never heard of the company, and my credit card provider refunded the money the first time but now it has happened again. What can I do as can´t get any answers from the credit reference company?

Maurice Thompson, Leicester

Our credit card finance expert replies:  It seems quite likely that a fraudster has tried to access you credit files by signing up to the agency using your details. You should have contacted the credit reference agency in the first place instead of the bank, but in turn, they should have contacted you if they suspected a third party was trying to access your credit file. Put in a complaint in writing to your bank and to the credit reference agency to try and recoup your money.

Q. How do I calculate credit card interest?

Answer.

Although I pay off my credit card bill each month online, I went into the branch last month to pay it as the server was down. The assistant at the bank told me this was no problem, but when I received my credit card statement, I noticed I was charged a much higher rate of interest than normal. I contacted the credit card provider who sent me a letter to explain the charges, but it was difficult to understand. Don´t they have a duty to explain interest charges in plain English?

Gordon Davies, Pinxton,Notts

Our credit expert replies: Normally, the average daily balance of credit card interest has the annual percentage rate (APR) applied to it, and you do have a right to have this explained in clear terms. Contact the customer service advisor at your credit card provider, and ask for a spreadsheet which will show clearly the amount you have spent and the interest added to that amount.

Q. As a student, is it wise to use a credit card?

Answer.

I am a second year student at University and I already owe quite a lot of money on a student loan. I am struggling financially as I can´t find a part time job, so would it be wise to apply for a credit card to help relieve some of my debts?

Jake Pilkington,

Lancaster Our money specialist replies: In our opinion, never apply for a credit card to relieve debts – particularly if you are a student. If you are already struggling with finances, a credit card is not the answer. You may think a credit card will help you out now, and you can pay off your debt in the future, but if you don´t find employment as soon as you leave university, plus you are paying off a student loan, you will find yourself in debt for years to come. And remember, if you only pay the minimum amount each month off your card, you will only be paying compound interest on the balance and you will find it even harder to clear the debt. If you are desperate for money and you can´t turn to your family for help, ask if your student loan can be increased.

Q. Why can´t I use a UK credit card to book a holiday?

Answer.

I have been trying, unsuccessfully to book a holiday with a French travel company online, but my credit card keeps being refused as it was issued in the UK. Surely there are laws against this, now that we are all supposed to be part of the European Union?

Billy Sales, Huddersfield

Our credit expert answers:  It is not unlawful for companies based in the European Union to only accept credit cards which were issued in their own country. Germany and France, for example, developed national debt card schemes which were outside the international schemes, while the UK adopted international standards. Service providers usually have to pay more to accept cards from outside their own countries, and if they want to opt for the lower cost option, they will refuse international cards. Any country is within its rights to refuse credit cards that were not issued in that country.

Q. We owe £35,000 on credit cards. Where can we go for help?

Answer.

My partner and I lost our jobs last year and have been struggling to pay off our credit card debts ever since. We can only afford minimum payments but this is not reducing the debt, and we need urgent help. Who can we turn to?

Philip Gordon, Northampton

Our credit card debt specialist replies: If all your debts are unsecured (which credit cards normally are) you should work out a budget, and see just how much you can afford to pay each month. Make a note of your total income and expenditure, and contact a regulated debt management company who may be able to arrange a debt management plan or an IVA (individual voluntary arrangement) to pay off your debts at an affordable rate. Contact your credit card provider straight away to ask them directly if they can arrange a reduced payment plan for you, but if they are not willing to help, a specialist debt company is probably the answer. The Citizen´s Advice Bureau can also give you invaluable advice about debt management. Bankruptcy may be an option but this should only be considered if there are no other solutions available to you.

Q. What credit cards give the best deals?

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I am thinking about changing my credit card. What are the advantages of moving from one provider to another?

Mark Spalding, Grantham

Our financial expert says: It really depends on the current deal you have with your credit card provider, but the main issues to address when looking for a cheaper option are: cash back deals, balance transfer and credit card usage abroad. Take your time to look around as you can take advantage of 0% balance transfer deals, even switching cards every 6 months to make the most of the interest free period. Use comparison websites or contact banks and credit card providers directly to see who is offering the best deals to suit your needs.