where has the credit gone?

[winterblues25]

I’ve usually never had a problem being accepted for credit but just tried to increase my credit limit on my card recently and was refused, new balance transfer card and loan applications refused, credit score good, even the balance transfer offers on my credit card which I’ve had for years have been withdrawn??

It’s swings and roundabouts, we could keep the money on our current account rather offsetting the debt and never have to use the credit card but we’d pay more interest

24% interest? This would keep me up at night. Not a penny would go to pension until this £8k had cleared.

No not really, even at 25% APR interest, money we could have directed to clear that debt would of still been better off in our company pensions as they match (or in my case triple) the contributions plus 20/40% on top re the tax. I like to balance things out though so would probably reduce the pension contributions if needed to if clear the debt a bit quicker if sitting at 25% as obviously pensions not available for a few years, we’ve quite a few other options for reducing that debt without resorting to feeding the children gruel, it’s a relatively small amount in relation to our overall income and assets

Clearly the banks agree with the majority of us in what your approach should be.

If you paid off the debt, you’d get the credit that you’re desperate for in order to pay for day to day “essentials”.

Can you genuinely not see that?

This yes!!👍

I got a credit card last year with a €12,000 limit and I earn less than ye! But I always pay it off in full every month. I’m not using it for day to day essentials. I put big ticket items like white goods or plane tickets on it. I have another credit card which I’ve been using for years and have never had any late fees etc. on it, plus a mortgage for years and have never been late paying it either. So I am obviously a good credit risk. You and your husband aren’t op.

@winterblues25 I have been reading this with interest – I must say I admire the way you have answered people calmly and not got angry.

I would say a couple of things tho (which have perhaps already been said – apols if I have missed them).

Firstly – the tone of your posts (at least the first few) is one of anger at the govt and its huge taxes and the banks for putting up the interest rates on your mortgage. I think if you are going to live your life and your family’s life with the kind of debt you describe, you need to own it. It is you that has bought things and spent money that you cannot repay. Your anger is misdirected. I am old, older than you, old enough to remember when the mortgage rate I paid was about 15%. It’s very low now IMHO (tho ofc it has been lower in recent years). No one has put it up to annoy you. Your mortgage when arranged should have been stress-tested against rate rises. And the tax issue – well. 20% is the basic rate and again, I am old enough to remember when it 30%. The nasty HMRC is not targeting you and your DH. If the figures you quote are accurate, even if he is giving £500 pm to each of his DC at uni, your DH cannot be paying the higher rate (which is only 40% after all) on very much of his income. Stop being annoyed about this and blaming others and own your debt.

Secondly – you say you have savings with which you could pay your debt. Yet you are I presume paying a pretty high rate on your CC debt – much more than you have in savings. Surely that's not good management of your money? Why not pay off the CC debt which must be costing you huge amounts?

We would look to pay more quickly than at current if it does go to 24%

So we start off the thread how you need the credit to buy every day essentials but you’ve been denied it.

To now… hey guys, chill out. It’s aaaalllll good?

What is it currently?

You can ask your bank why you’ve been refused and they are required to send you an adverse action letter telling you why.

Regularly using over about 50% of your credit limit can affect your rating, even if you don’t miss payments, as can making lots of applications in a short time.

I was replying to another poster asking if money was going on every day essentials and truthfully said yes it is, then some people jumped on that to make a mountain out of a molehill. We’re not a family who at the moment has money spare for holidays and luxuries in addition to our pension contributions and paying the capital off our mortgage plus topping up the uni maintenance loan but neither are we about to enter the workhouse

what do you regard as “every day essentials” that you need credit for?

She has explained that already.

i just saw lots of talk about gloves and long last shoes.

So if good gloves and shoes need credit, does that mean you’ll just have to buy cheaper pairs?

As for the banks, they are a business and my anger was directed towards people who were stating the banks ‘were doing me a favour’ by offering credit only at a less favourable rate or not at all. The credit we’ve had over the last few years has been a very positive thing for us and nothing has changed in our circumstances. Fair enough if they want to make a business decision or one pushed on them by government, I don’t have an issue with the banks per se

As for taxes then if we were able to keep at least 60p in every pound extra earned and the thresholds had kept up with inflation then we wouldn’t consider a 40% tax rate so grossly unfair, but for families with a parent earning over 60k the loss of entitlement to child benefit (which if you raised children before 2015 was fully non means tested) makes the marginal tax rate quite may go , add on student loan repayments of 9% and the loss of entitlement of your children to the full maintenance loan then the cumulative effect can make it impossible to effectively increase their income through just working a few extra hours: For families lower down the income scale UC can have a similar effect. We can agree to disagree but I won’t be voting in any government who wants to maintain such an unfair and inefficient tax system

With regard to mortgage rates, we’re not actually paying that much more than when we first bought our house, so no it didn’t come as a surprise to us rates may go back up, indeed we consolidated half of our credit card balance into a loan set to replay precisely just before our mortgage renewal, the amount of the monthly loan repayments being what our mortgage repayments would be with a 3-4% rate increase, as it was our mortgage didn’t go up that much thankfully!

It all sounds like a tough time for you and family @winterblues25

I hope then that the banks ease up and give you the credit to allow you buy these every day essentials

I’ve had the opposite lately, my credit card limit was doubled today, my income hasn’t changed and has actually gone down since I took out the card. Even my Next account limit has substantially increased over the last few years, I don’t even use it regularly.

Ha, no will still be buying us decent shoes and gloves ☃️

So you don’t need credit to buy shoes that last “6 years rather than 6 months”?

@winterblues25 the loss of entitlement of your children to the full maintenance loan
Are you aware that the vast majority of YP in this country are not entitled to a full loan? In fact with a HH income of about £60k (eg 2 x £30k, hardly masses) the loan is the minimum? HH income has to be about £25k IIRC for max loan. So basically most of us with DC at uni are in that position.

I won’t be voting in any government who wants to maintain such an unfair and inefficient tax system
I think there are some anomalies in our current taxation system, but they hit people who earn a lot more than your DH tbh.

We can make more money but then we’ve found most of it goes in tax
I mean that’s just not true. The highest tax rate is 45% so less than half and that only applies when you earn £125k which I infer your DH does not.

the government wants to tax us to the hilt and the banks want to rack up our interest rate
This is what I meant about nasty govt and banks. Yes you pay tax. Yes you don’t sound like a great credit risk. You need to own the debt and not blame others for it, is all I was saying.

Pick up 10prs of identical gloves for a couple of £ each. Do you really not have £20 to buy them without resorting to credit? I’m not knocking you if you don’t- plenty of people are in the same situation. But to not have £20 in your bank for gloves (which in winter I agree are essential) suggests there is something very wrong somewhere.

I get regularly offered credit increases too. Use my cards loads for day to day spending protection and points, then pay everything off regularly. So I'm not sure this is a general tightening of credit.

Just went on my NatWest app. Bombarded with offers!