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Original poster

Defaulting on Credit Card

51 replies

Pisces90 · 30/01/2019 10:11

What happens when you default on 1 credit card? Does it affect your other credit accounts?
I will keep this short. I have 1 CC and only paying min payment. I am really struggling with this debt.

OP posts:
AdoraBell · 30/01/2019 10:41

Yes, it will have an effect on credit rating, I’m sure how that would effect existing credit cards though. It would be much better to speak to them than simply not make a payment.

SuperLoudPoppingAction · 30/01/2019 10:42

I imagine they would insist on you paying it back all at once after the first couple of missed payments.
It would affect your ability to borrow in future eg get a mortgage or remortgage.

What barriers do you have to meeting monthly minimum payments?
If you can pay even a couple of pence more than the minimum it will help pay down the debt.

Frosty66611 · 30/01/2019 10:44

Speak to Stepchange. I was struggling with credit card debt badly a few years ago and they got me on a dmp and got my interest frozen with all my creditors so I was only paying back the actual balance. They also arranged a really low monthly repayment that I could afford. Once my finances improved a couple of years later I was able to pay them off more quickly by increasing the repayment amounts. Best thing I ever did!

Original poster
Pisces90 · 30/01/2019 11:11

In all honesty i don't even care about my credit rating. I stay in a housing association house. Had a secure tenancy for well over 10 years so a mortgage is no issue for me.
The barriers i have are i am currently not working. The credit card was taken out when i was and before i had my baby(now 3) I had a messy break up and haven't had proper maintenace(absent dad) for nearly 2 years. Cms arrears sitting at 1.5k..not a fortune but that's what we have had to go without.
I used the stepchange website. Input all data correctly and they said my budget is enough to cover my debts. But the amounts they showed i should be paying out wasn't accurate. It was showing i was paying out less than i really am. Maybe they don't take interest into account? If that makes sense.
I can manage my Very account and i do have a Paypal credit account but that has a very low balance. It's just this one credit card! I see no end in sight with it.

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Original poster
Pisces90 · 30/01/2019 11:14

One thing i have heard is if you go to a debt help agency they tell you to treat your debts fairly. I only have 4 credit accounts and 3 of them are more than manageable. The amount i pay each month for that 3 amounts to the same as this 1 credit card. I don't want to lose my other accounts but not sure how i can get help with just 1 debt.

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Frosty66611 · 30/01/2019 11:14

Phone stepchange as they are so helpful and will make sure you can 100% afford your debts. Their website input thing isn’t always accurate, it wasn’t for me.

Frosty66611 · 30/01/2019 11:16

Yes if you got any help from a debt charity then all of your creditors would have to be included in the plan. It still worked out well for me as even though I lost the ability to use all my credit cards, I was only have to pay back about £5 to each of them per month which meant I had some disposable money to live on too

Original poster
Pisces90 · 30/01/2019 11:20

Thanks frosty i did click the reply button on your post. Not sure how quoting works around here since i am new.
My CC is with Vanquis btw. It's also only sitting at half the maximum balance. When you have little money then even small debts can be a struggle. Sad
Has anyone ever successfully negotiated with Vanquis?

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Frosty66611 · 30/01/2019 11:22

Yes one of my debts was with vanquis. Stepchange for the interest frozen and I think I paid about £6 a month to clear the balance and then Vanquis cancelled the account

Original poster
Pisces90 · 30/01/2019 11:27

It seems if i go the Stepchange route i will need to let go of all my credit accounts and i don't want to do that. Sad I really don't know what else i can do to clear this one credit card which is eating away at me every month.
I read if you have done min payment for a long time then your CC company has to offer some sort of help but when i got some maintenance i paid extra because i was so determined to get rid of the Vanquis card.

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Frosty66611 · 30/01/2019 11:34

How much do you have to pay on it?
If you are only in debt with one of your creditors, you could eventually get into debt with the others as you’ll have to be using some of the money you use to pay them to pay for the vanquis one and it will begin to spiral.
If you phone vanquis they might have a payment plan type thing you could do. They may just tell you to phone Stepchange though as that’s what they did to me.
Are there any cuts you can make such as on your heating bill (I used uswitch to move from British Gas to npower and saved about £35 a month which I was able to use for my debts). Could you go on a cheap pay as you go sim contract? Do you have any furniture you don’t really use that you could stick on gumtree (I sold a bedside table and exercise bike there for about £80). Any memberships you could get out of like a gym one? Do you smoke/eat out? Could you cut right down on your weekly food shop by batch cooking? Could you take anymore work on? Even just one evening a week could bring in another £50 a week (or £200 a month). Hope you manage to sort it as debt is soul destroying x

SuperLoudPoppingAction · 30/01/2019 11:35

Do you absolutely need the other cards? Very and PayPal.

Because maybe if you went the stepchange route you could save the amount you would normally pay off, and that would be put aside for the things you usually use credit for.

Frosty66611 · 30/01/2019 11:36

Also, not sure if you are aware but if you default on one credit card then you won’t get credit increases ever again with any of your other cards until the defaulted one has been paid back in full

Frosty66611 · 30/01/2019 11:39

Sorry also forgot to say that if you default with vanquis they will pass your debt to a bailiffs so it’s really worth avoiding even if you have to lose your other credit accounts

SuperLoudPoppingAction · 30/01/2019 11:44

www.moneysavingexpert.com/banking/Budget-planning/
This website is really good.
That's a relatively random link but they have content on reducing expenditure, paying back debts etc

Original poster
Pisces90 · 30/01/2019 11:56

I pay approx 70 a month to it. I know it may not seem a lot but it is for me because i am not currently working(believe me i am trying) and i get no maintenance so with christmas just passed it's hitting home how much i struggle.
Will just clarify a few things. I am on pay as you go electric box. I pay a fiver a month for my sim only contract. I have never smoked, i am practically tee total because nights out with the girls only happen every few months these day. (If we are lucky!) I rarely eat out and have no gym memberships. I don't run a car either I have stopped getting tesco deliveries because it's always min 40 and i end up buying crap. I have started going to iceland after dropping my little one off at nursery and getting what i need as i go along. I am already seeing i spend less.
It's not that i need the Very and Paypal but those debts are so much easier to keep on top of. I have used buy now pay later with Very lots of times and always paid before interest is added which is great. The CC just never seems to go down. I had to rely on it a few times over christmas and not for frivillous crap but to pay for shopping! I seriously think my only option is to default and wait until the debt is sold on where i can pay it back at an amout closer to what i actually owe rather than the crazy interest amount.
Has anyone ever defaulted on a credit card? I was hoping to hear from someone who has. Thanks for all the replies guys.

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SuperLoudPoppingAction · 30/01/2019 12:03

If the debt is sold on, wouldn't you have to pay more back to the organization who bought it?
Whereas stepchange would potentially get the interest frozen.

I know £70 a month is a big chunk when you're struggling.

One reason you might want a good credit rating would be to change over to a standard electricity meter and save money being able to shop around for a good deal. Is that something you might want to do?

Frosty66611 · 30/01/2019 12:04

I didn’t default with my vanquis one but I defaulted with my Barclaycard one and was receiving threatening letters from bailiffs and it was ruining my life.
If you went with Stepchange then you would lose the ability to use your very and PayPal accounts but if you got the interest frozen on all 3 of them and only had to pay back about £5 a month for the 3 of them then you could use the savings you would make to be able to still buy the things you want to buy with them.
For example (I’m just guessing these figures as an example to give) :
If you currently have 3 credit cards each with a £1000 limit on them and you pay about £50-70 a month on interest for them each, you could get the interest frozen and just pay back what you can easily afford (let’s say £5 on each). That would be £15 total to clear the actual balance instead of the £150 you are paying just to clear interest. You would then have £135 spare each month for daily living (step change take this into account and make sure you have a bit of disposable income each month for day to day living and emergencies etc so you aren’t just 100% paying debts, rent and food). You could save a bit of that away each month for birthdays and Christmases

Frosty66611 · 30/01/2019 12:05

@superloud yes if the debt gets passed to a debt collectors then there will be fees added. My Barclaycard debt went from about £250 to £600 because of that

SuperLoudPoppingAction · 30/01/2019 12:06

You don't need to justify your habits at all BTW.
I've been in the same situation.
It took me 3 years to find a job.
It took nearly 7 years for xh to pay maintenance.
It's desperate.

AnchorDownDeepBreath · 30/01/2019 12:10

I seriously think my only option is to default and wait until the debt is sold on where i can pay it back at an amout closer to what i actually owe rather than the crazy interest amount.

If you do this, Very and PayPal are very likely to either massively reduce your credit limits or completely take away your ability to use them - which means you'll be able to make payments to pay off your debt, but you won't be able to borrow from them anymore. They are both very risk averse lenders.

You can't get spot help with debt. If you can't service all three, the only thing you can do is write to Vanquis and ask them if they will freeze your interest for a while and help you to pay the debt back. They may well then stop you borrowing more with them and they don't have to agree, but they'd usually rather make an arrangement to pay than have you not pay anything.

If it's sold, they'll sell it for a lesser amount than what the debt is, but the new company will be entitled to pursue you for the full amount. If it gets sold to an aggressive company, they may well go for a CCJ if you have a history of not paying. Vanquis are well known for this.

If you've got no choice, don't pay it. Prioritise food, rent and council tax, of course. But be very aware of what not paying it will do to the rest of your accounts and your credit record.

dementedpixie · 30/01/2019 12:11

Is Very not a catalogue? Sounds like op uses it and pays off everything interest free anyway. Have you tried calling Vanquis?

dementedpixie · 30/01/2019 12:17

www.vanquis.co.uk/existing-customers/vanquis-repayment-option-plan - this suggests they may be able to freeze the account although they do add a fee on each month

Original poster
Pisces90 · 30/01/2019 12:53

In my mind if the debt was eventually sold on, even if it was more it would still be a set amount. Whereas this CC has interest added every month and from calculations i seen on the money website it would take 27 years to clear out a 3k debt when paying minimum payment. My CC is only at 1k so potentially 9 years to pay the debt! Go only knows how much interest that adds up to.
My property has storage heating and am currently spending 30 a week. I am already on cheapest PAYG tarriff and when i looked into billed monthly tarrifs i would be no better off.
My Very account isn't all interest free. It allows me to make some purchases by now pay later and some credit. I have already opted for no credit increases on Very and Paypal(this one is rarely used)
Thanks for all the replies.

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Original poster
Pisces90 · 30/01/2019 13:01

I better add just for clarity that i am in Scotland so i don't think CCJs apply to me.

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