To ask if I'm in trouble with the credit card?

[ILoveAndrew]

Hello everyone,

I've received a letter from my bank which says what is written below. My credit card is at it's limit of £1000 and has been for some time now as I have just been paying the minimum payment off each time. Does the letter mean the credit card account is being closed and I need to pay the £1000 off soon? 😭I'm really panicking!

It says;

Dear ILoveAndrew,

Your credit card expires soon but unfortunately, we wont be sending you a new card. There are a few reasons for this, including your account history and information from credit reference agencies.

What happens next?

If you use your card to make regular payments (like subscriptions), then you'll need to make other arrangements to pay, as you'll no longer be able to use your card after it expires. This includes balance and money transfers.

It's also important to remember that if your account is in credit, you'll need to contact us to get this refunded before it's closed. Once your card has expired and you've paid your outstanding balance in full, there's nothing else you need to do, we'll close your account after 60 days.

You should also continue to pay your monthly minimum payment on time. It means that you'll avoid late payment charges, and any impacts to your credit file. Plus, if you've got a promotional interest rate it will continue to the end of it's promotional period. After that you'll be on current standard interest rate.

So, that's the main content of the letter. It sounds like they're just taking the card away (which is fine and a good thing) but I won't have to pay my credit card off in full. Is that right? I can't spare £1000 at this time.

Thank you in advance.

No you just need to pay it off but can't ever use it again.

Sorry not in one go

You need to continue to make payments until the balance is cleared but they won't be issuing you with a new card.

No I think it just means you won't be able to ever use it again but you still have to make monthly payments.

A credit card is not repayable on demand (like an overdraft is for example). They have mentioned that you need to keep making monthly minimum payments.

No, you can still keep paying it off - they’ll just close it once your balance is at 0.

Anyone know why the bank would do this? OP regular pays the min and uses the full limit so good income for the bank

Thank you for your replies. Phew! Thank goodness for that. I'd rather not have a card to be honest. It's so easy to just keep spending on it.

You might find this has impacted your credit rating unfavourably. It's a good call not to have credit at the moment because it sounds like it's causing you problems. Sadly, having credit is what makes you a good prospect tho.

That is probably why - it’s at its full limit and OP is paying the minimum. Banks are supposed to be more careful with customers in debt, and OP reaching the limit and not being able to pay it off suggests she’s at risk at not reducing her debt, hence why they’re not allowing any more spending.

There is some legislation around persistent debt and banks now have to address it if customers are accruing more in interest and charges over a 36 month period than they are paying off even if the minimum payments are being made.
This wont affect your credit rating as long as you continue to make at least minimum payments and on time but it will limit your borrowing power with this provider - it shouldn't with other providers though (be aware that many banks are linked and this would be the exception as they would be able to see the info from the one you are with)

Have you looked into moving to an interest free credit card? If you are paying minimu payment and interest it’ll take a while to clear

Op is exactly the kind of person who makes good money for banks. Thankfully, some banks are starting to be responsible and are trying to be less predatory in some ways. A person who carries a balance near their credit limit and only makes minimum payments is displaying behaviors that indicate very risky behavior with regards to credit.

Contact your cc provider, they should be able to offer you reduced interest rate to pay off the card.

Have you considered a balance transfer to an interest free card if you can find one that would accept you? Then you can have some breathing space to actually pay down the balance without incurring more monthly fees.

Even if you can barely manage the minimum payments, even an extra £5 a month above the minimum will make such a difference with how quickly you pay it off. Minimum payment will take years maybe even decades!

It's very badly written, are you sure it's legitimate?

read it again, it's perfectly clear.

Yes, you do have to keep repaying your CC debt in monthly payments, until you have paid it all off. If you fall behind inpayments, you will incur extra charges and a higher debt.