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refused, credit score good, even the balance transfer offers on my credit card which I’ve had for years have been withdrawn??

Bizarrely this can affect your credit. I paid off a loan and my credit rating dropped. I upped the credit limit on my credit card, and my credit score went up. Even though I will never use the full limit on the card. Also, some will only offer credit if your rating is excellent.

She says they’ve got a mortgage.

My credit rating was always excellent but dropped to good a few months ago, no idea why, had still been able to get loans or balance transfers when needed.. until this month 😕

So our total debt is about equivalent to 2 months of our joint income

Which is what? About 6k?

And you spend that every month on essentials?

If you are only paying the minimum and have used up your available credit on the card they are not going to increase it and you won’t me a good prospect for other providers. If you spend the next 6 months seriously working on reducing the debt by paying 2,3 hopefully 4 times the minimum and they can see you making inroads significantly then you have a better chance of a lower interest card then. Not missing a payment doesn’t matter if it’s only the minimum

I’ve literally just read a story in the telegraph which says that credit card defaults are at a two year high. With your history of using the card for essentials I expect you are not seen as a great credit risk right now.

Not sure having debt is alien to most people, DH has a take home income of about £2800 after tax, NI, SLC and contributing towards his DC uni costs (due to them not being eligible for the full maintenance loan due to his income) and mine is about £1100 a month, plenty of couples who are not on higher incomes have the same joint take home pay and are not only assumed to have plenty of money. We’re not leading some lavish lifestyle, just making sure kids have clothes, decent food, can go on school trips etc. We’re not wildly building up debt, setting up home cost is a lot of money plus childcare (before the new funding) so that’s what we’ve been paying off, but our income fluctuates (e.g I was on maternity leave last year) so we’ve had to borrow and then when e.g the funding started for the older ones and then again when I went back to work from this mat leave we’ve had a bit more money to be able to get our balances back down. We’ve been glad to have that flexibility else we’d be living in poverty some years and then plenty the next where we this way we’ve been able to spread the cost of having children out a bit more

But actually this is probably intended to spur you on to pay the debt off rather than just keep transferring it.

The fact you were applying for an increased limit suggests your debt is growing.

This is how people end up in trouble financially

They are doing you a favour at this point as responsible lenders encouraging you to stop further borrowing, and pay off what you already owe.

Op you refer to past debt

and the fact is… it’s not in the past. It’s very much in the present too.

That’s not going to happen as I’m not going to stop buying decent food, buying my children decent clothes, stop all their clubs and not send them on any school trips or live in a cold house, I simply wanted to be able to continue to spread out the cost of raising a young family in the same way we have done over the last 10 years without any problems. ie. One year our debt balance is 8k and we pay off 2k but the next I’m on maternity leave leave and it goes up to 11k, the next year we pay off 3k etc, we pay £400-500 in interest but that’s worked for us. Paying 3k in interest instead won’t do us any favours

Ok so don’t make any chances
continue to accrue debt

at a higher interest rate than ever before

How old are your children?

They are not doing me a favour, our overall debt was higher before but we cleared a lot then cancelled card or it was a loan. We’re not going to spend less either way as the things we’re spending it on are a priority to us, we’ve brought our overall debt level down significantly over the last 10 years so things are getting better gradually for us, I just resent the idea of having to pay 3k in interest instead of £400-£500

contributing towards his DC uni costs

They should be working and paying their own costs. Both of mine did even though they also were not eligible for the full maintenance loan.

10,6 and 1

It’s just something he wants to do and don’t want to interfere really, it’s money he earns and would rather have some debt now ( just less angst all round) it isn’t problem debt for us, just mean it will gradually go up if we’re paying 3k a year in interest rather than £400-£500 as we can only afford to pay off about 2k a year

Those things might be a priority to you... But you can't afford them. We can't all afford everything we want.
If you don't want to cut back?
You'll have to make more money

Well that’s what looks like will happen if they don’t want to lend me at a lower rate now, just something going to have to accept, I’ve pared down our spending to the minimum standard of living would want for our family. Once DH DC finished uni we should have significantly more disposable income. If we get a government that unfroze the tax thresholds or mortgage rates went down that would make an enormous difference too

Its not credit being choked, its due to.persistenr debt
Due to the amount of people going after the CC companies for irresponsible lending they are clamping down.
Post your debt and your repayments/ outgoings
Folk are helpful on here

You don't get to decide on a 'minimum standard of living we would want for our family' if you can't afford to pay for it

I could say til I'm blue in the face that the minimum standard I want for my family is a 6 bed house in Wimbledon and a Ferrari but if I cannot afford to pay for it, I can't have it

I’ve pared down our spending to the minimum standard of living would want for our family

You need to pare it down to what you can afford until uni is over or else you will rack up more debt

I have to agree with this.

You keep talking about "decent clothes and decent food".
You'd be able to afford these things if you weren't paying all that interest.

It is bizarre to me to have lived with this debt for 10 years when, with a little focus you could have been paying it down.

You seem to be talking as though it is normal to live with continued debt like this. It isn't. If you can't afford it then don't buy it.

We can make more money but then we’ve found most of it goes in tax, SLC and childcare, the extra stress isn’t worth it. We’ll carry on as we are, it will just take longer to pay off if not being able to access cheaper credit

We have been paying it down, it’s half of what it was 5 years ago

Your finances are very close to the wire
You are in debt
presumably have no savings

Can you really not see that this is a sensible approach to your circumstances that the bank has taken.

I am not in the same position as you and credit is still forthcoming if I wished to draw upon it