Credit Card Debts Warning
Credit Card Debts are set to increase next month due to what the FCA describes as persistent debt issues.
Persistent debt is classed as an individual who pays more in interest and charges than what they have paid off from their balance. If you have been struggling to make your minimum payment over a period of 36 months, you could find that you are no longer able to use the facility from next month onward.
The rules which were designed in 2018 to reduce the cost of borrowing by encouraging customers to pay back their credit card debts sooner, where they can afford to do so.
Trust Deed Scotland have spoken to thousands of worried clients over several years, many of which have had two or more credit card debts as part of their overall debt amount and are concerned that credit card lenders may not be doing enough to explain the process to their customers. The response varies from lender to lender.
Amanda Hendry of Trust Deed Scotland advised “Whilst we understand that these measures were taken to help individuals manage their outstanding credit card debts, there has been an overall lack of communication or sense of urgency shown by the credit card lenders.
There may be a vast number of people in Scotland holding hidden problem debts across multiple credit cards, personal loans and bank overdrafts.
These debts will come to the surface and become unmanageable to the extent that priority debts could be missed as a result.”
Virgin Money, the owners of Clydesdale Bank are said to be suspending their customers’ accounts from March 2020 onward alongside TSB.
Nationwide will start suspending credit cards with persistent debt issues from February.
Nationwide told the Mirror newspaper: “The card will be suspended once the person has reached 36 months in persistent debt and they will then either need to have a 48 month pay down plan with no more borrowing (FCA requirement no more than 48 months) or pay in full.”
HSBC, Royal Bank of Scotland, Santander and HBOS have yet to comment.
Credit Card Debts Help
If you have credit card debts and live in Scotland, there are options open to you where you can legally freeze interest and charges and get your monthly debt repayment amount back down to a level that is affordable, based on your own circumstances.
Trust Deed Scotland can give you free, confidential advice on these solutions. Including the Debt Arrangement Scheme and Trust Deeds. You may even become debt free after 48 months and write off as much as 70% of the debt you owed.
If you are worried about credit card debts, give us a call on 0141 221 0999 and our experienced debt advisers will talk you through the pros and cons of these solutions and alternatives.