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refused, credit score good, even the balance transfer offers on my credit card which I’ve had for years have been withdrawn??

I got into serious credit card debt many years ago. The amount of credit they gave me as a 20 year old was frightening. In the end I ended up contacting them, getting them to cancel the card freeze the interest and I took out a loan to pay the outstanding balance

my Experian score ( I know doesn’t count that much) is 1250 out of 1250. I’ve just had Virgin cancel my £5k , just in case credit card , as I’ve never used it. Credit options are being removed from everyone

Yes did look at consolidating into a low interest bank loan over 3 years and that worked really well for us previously, we cleared half our debt that way, just in time for renewing our mortgage, which worked out quite well as like everyone else renewing at a similar time we ended up paying several hundred pounds a month more on our monthly mortgage repayments, which equated to just under what we’d been paying on our loan 😊 Looked at the same the other day and was declined but possibly because looking to pay off over 12 months, may have been accepted if had requested over a longer period? Don’t want to apply again though in case affects credit score. Maybe it’s our mortgage payments having gone up that’s affected things? However has been over a year and they’ve only just pulled the balance transfer offers

Don’t want to apply again though in case affects credit score.

yes last year I got a couple of interest free credit accounts and my score dropped dramatically. Only after 6 months did it start to rise again

Yes I had friends that went crazy with credit when they were young years ago and really impacted on their lives, e.g were never able to go to uni to study for new career as had IVAs which stipulated they must remain in employment, they’ve never been able to buy a house and always paid over the odds for car finance etc. That did make me very wary of getting into debt for frivolous things and if ever in any debt trying to pay off what we can afford: Thank you for sharing your recent experience, perhaps a general thing that’s happening then, helps to know things are going in that direction

as had IVAs

i was so close to taking an IVA as it seemed like an easy option at the time. I so glad I didn’t as, like your friends, i wouldn’t have the life I have now

please talk to your current credit card company and see what options are available to you. Don’t be worried about telling them you are struggling

You still haven't explained OP why you were seeking to increase your credit limit then?

Why do all the work to halve the debt only to ask for more credit again to potentially end up in more debt again?
It just makes no sense?

You've also mentioned applying a loan recently and being declined, it all paints a picture of desperately seeking credit while not making inroads into your current level of debt in recent year or two. This means banks/lenders start getting twitchy they might not get their money back and they won't let you stay on 0% balance transfers indefinitely as how would they make any money out of you that way.

@winterblues25 apologies if this has already been mentioned but I’ve only read your posts and replies.
have you logged into Experian (or money saving expert) to see the detailed credit score?
if you have been applying for lots of different cards/deals, you might have inadvertently racked up a load of ‘hard credit checks’ rather than soft one, which don’t affect your credit. If you have, this will be explained in your rating. In which case, you’ll need to leave it three months before making any more applications.

Until now it’s only been 5% PA which has been wiped out by inflation, usually using it to buy things when see them on offer, e.g children’s coats in Asda on sale after Christmas or food and then use the money would of spent on food on swimming lessons for the children. I do consider in a worst case scenario they that could be paying 25% interest if balance transfer offers pulled, it’s a gamble like much in life but would still do so in hindsight rather than our children not have those things. Is not ideal and will definitely be voting the people out of office who have decided to take so much tax off us that we don’t have the spare money for swimming lessons

This thread is frustrating to read! If you made some changes and adjusted your spending, you could easily get out of debt quickly. But you seem to be fine about having the debt. I think from reading your posts you have a spending problem.

You buy spares of clothes, in case you get behind with the laundry, in case they lose a pair of gloves - this is so unnecessary.

You spend hundreds of pounds that you cannot afford on swimming lessons, when you could either teach them yourself for very little, or wait until you can afford to pay for lessons.

You spend money on school trips for primary school children, another unnecessary thing when you clearly cannot afford it.

Your DH is supporting two adult children in uni, when his wife has an out of control spending problem and as a household are in debt that you are struggling to pay back. I get he wants to help his children out, but the crux of the matter is, he cannot afford to. He's on a relatively low salary - you said a high earner, but at £2800 net, that is still only average. Surely his adult children can work part-time jobs whilst they study to help support themselves? Even if it's just until their dad gets out of debt.

If I were you, and I know this advice will fall on deaf ears. But I would spend the next 6 months buying ONLY the essentials, and I mean essentials. No spare clothes for the hell of it, you can make do with whatever shoes you all currently have, no expensive foods, no clubs for the children, literally only the bare essentials. Use every single penny saved to through at your debt, and I would be confident enough to think you'd have most, if not all of it paid off by then.

The thing with debt is, you got to want to get rid of it to get yourself out of this hole. Sadly, I don't think you're in that place.

Please watch some Dave Ramsey on Youtube. I feel like I tell people this a lot on here recently, but just listening to a few of his shows, and hopefully you'll realise how stupid you're being, and give you the want to get yourselves out of this mess.

I'd also suggest upping your hours at work, if at all possible, I know you've a 1yr old so not sure what childcare you have in place. Or perhaps you could get a weekend job/work on your DH's days off. Just as a temporary measure 6-12months or so.

will definitely be voting the people out of office who have decided to take so much tax off us that we don’t have the spare money for swimming lessons

who? You’ve been fighting debt for over five years - that government isn’t in power any more

I got a balance transfer recently for 0% but the limit I could transfer was really small. Never had that in the past. I was lucky I could find something else.

could it be due to the credit limits on your cards are high (even if the balance owed is much less). We’ve found that randomly card companies extend the limit to a ridiculous amount without even checking we want it.

also making numerous checks for cards can reduce odds.

have you cancelled any old cards?

Hope you get a resolution soon, as paying interest is a real kicker.

@winterblues25 apologies if I'm being too simplistic here

But the bottom line is, credit isn't going to be available forever. I've known a couple of other people who thought that they could keep doing balance transfers, etc. But it doesn't work like that. There's always a point where you can't get access to the 0% balance transfer and then quickly after, you won't be able to get credit at all, until you clear it

So there's no great mystery here. It's just credit and how it operates.

regularly paying off credit is not as helpful as you think it might be, but that's almost the reverse of what you're asking. You're still having to use credit to pay things that you considered daily expenses - so you are heavily reliant on credit and the institutions will factor that in when you apply.

It's not like you are stoozing (if anyone remembers that, I think that was the word) and there is a certain amount of credit that you can have against your name. And you have both reached that.

The problem with a balance transfer or loan is they still leave the original credit limit available to you.

Clear credit card £5k balance with a £5k loan or low rate balance transfer. While paying that at a lower rate you then use the credit card again and now have two bills. Credit card balance gets bigger and you’re in more debt than before.

Been there. If only banks had been sensible then. I’ve spent thousands on interest.

We’ve just got different priorities and probably also completely different life experiences. With a busy household to run, including a 1 year old who by their nature tend to be quite needy, particularly when ill, as she is a lot at the moment (1st winter in nursery) a DH who works very long hours and a demanding job myself then I need to have systems in place which ensure that I have sufficient school uniforms, gloves etc. I only get a few hours of broken sleep with the baby as it is so I can’t be staying up to wash one set of uniform etc or be searching for an item when I’m trying to coordinate getting out of the house with a baby and 2 children, I can’t be late for work because I couldn’t find a pair of socks. Neither can I dash out to re buy a set of lost gloves when I have to go straight to work from the childminders or search through the school lost properly until a day I’m actually not at work and collecting the children. The swimming lessons for 2 children actually cost exactly the same as family entrance the local council pool. Our eldest would be a teenager by the time we could afford to pay for swimming lessons without being in debt, to us they are not a luxury. The children don’t attend expensive clubs, just the ones run by the teachers with a £3-4 a week charge for materials, and the local children’s club in the village hall. My DH works most weekends and then I work most of the other weekends he doesn’t work. Aside from that we’re flat out just caring for the children and house. We live far more frugally then almost everyone I know. We choose to clear debt we have at a rate that we feel does not compromise our family’s wellbeing

We’ve done it for years and have still reduced our overall debt

We’ve got far less debt than we had previously so that argument doesn’t make any sense?

Thank you ☺️ the limits on my cards have remained the same for the last few years and the applications have done say they are only soft checks which apparently don’t affect credit rating. At least once DSC finish uni we’ll have more spare to pay things off faster

I just wanted to transfer a balance that will soon start to be charged at 24.9% either through paying the balance off via a loan or transferring to another card ( however the balance transfer offers on that card have disappeared now so would be useless having a higher limit)

Yes, it’s really sad to see the impact it’s had on their lives. We’ve been fine up until now and will still be fine making the minimum payments so are not struggling as such and will have a lot more free cash to pay towards them once DSC finish uni, just unfortunate the low interest rates have disappeared

Wouldn’t consider 2 months of income substantial debt

So why not pay it off then ?

I was hoping to have replies from people who have, not people trying to feel superior for either having more disposable money than us or martyrs to poverty

Living within your means, rather than paying interest on everything you buy, isn't being a "martyr to poverty" it is just common sense.

You'll find lots of people manage it on FAR lower incomes than your family have.

Have you closed all of your old accounts down when you do the balance transfer?

Yes

Because we can’t just not pay our mortgage, council tax etc for 2 months

My sister said she struggled to get a loan for a car but she is using 80 percent of her cards so thats maybe why.