mbna threat to credit rating

[keiko1311]

keiko1311 wants to know..... I sent a letter to mbna about my current credit balance. When I first signed up with mbna the interest rate was around 14% and the minimum payment per month was approx 2%. The 2% minimum was on eof the reasons to choose mbna. This was in summer 2003.
At the moment they are asking 24% apr with a minimum payment of 3% per month.
I wrote to them asking for the terms of the original contract to be re-instated.
~They eventuallyb phoned me up to say that they would not change the terms, and was I having difficvulty in paying. I said - yes I was having difficulty, (and I am as it happens) just to see what they would offer. The guy asked me how much I could afford per month - so I said about £160 per month (at present I am paying about £265 pcm with their 'new' terms.
I was told that ok they could make a special arrangement to pay the £160 but this would have an immediate adverse effect on my credit rating, and that I would not be able to obtain credit, nor would I be able to remortgage any of my housing portfolio for something like six years AFTER I paid mbna off. I would not be able to use my credit card, and my account would be closed after I had paid it off. The thing I want to know is - if mbna is an unsecured debt - can they really affect my secured mortgage credit rating and prevent me from re-mortgaging my houses when the present mortgages are ended? My credit rating is pretty good at present. But If I keep servicing these greedy credit arrangments (2 cards and hsbc bank loan) then I cant afford to repair car, go on holiday etc. Not whinging though - just dont like being ripped off.
Is the mbna contract from 2003 enforceable in law anyway?
keiko1311

[Caspar]

Re: mbna threat to credit rating

The enforceability of the original agreement is impossible to comment on without seeing a copy of it - have you got one you can post up with personal details removed? If not, have you asked them to send you one?

As far as the effect on your credit rating, sadly for you they have the right, and indeed a duty to report accurate information to the credit reference agencies - they normally do this once a month.

Obviously if you pay less than the minimum payment, this is going to be reported and will have a negative effect on your CRF. Any further credit you then apply for will show this negative marker, which, if you miss several payments, could well end up in a default being registered against your account.

[keiko1311]

Re: mbna threat to credit rating

further to that then - cmpany called debtcorrect claim they can make 'arrangement' with credit cards to pay less, and that this will not affect my credit rating. So Debt Correct are spinning me a yarn then?? [also debtcorrect want fees up front .
AND no I havent got the original mbna agreement and I have not asked for one. Should I and how?

[Caspar]

Re: mbna threat to credit rating

If you are in doubt as to whether the agreement is enforceable and it's pre-April 2007, then it's probably worth your while sending a CCA request with a £1.00 postal order (see CurlyBen's thread Dealing With DCA's for template letter). If they send you a reconstituted agreement, then send the CPUTR letter DCAs buying debt - D'oh! - Legal Beagles Consumer Forum Post #6 and see how they respond.

As far as the credit card issue goes, I do not know of a way to reduce payments below the minimum without it being reflected on your CRF. I did find this about Debt Correct:

This company is probably the worst company, do not deal with these people they take money from your bank account without permission. They state that you have a seven day cooling off period, which you never get. The welcome pack you do not get until the cooling period has elapsed & they have taken money out of your bank account. Also I have discovered that they are not a legal regulated company. This information was given to me by two legal regulated companie's. Now they do not answer the phone when you call them. In my opinion these people or con men. Please do not give them your card details, I would not wish another family to suffer the way we have.

I'll let you make your own mind up!

[Guest]

Re: mbna threat to credit rating

HI
Yes I know it beggars belief doesn’t it. Credit card companies in general and MBNA in particular would rather accept a debt management plan where they freeze interest than entertain the idea of helping out by reducing it when a possible problem is pointed out to them.
You would think that they would agree to a reduction in interest rate when a customer has proven that they are in financial difficulties but still wish to remain with them but this is not the way they think.
As far as they are concerned the situation is either, you can afford the rate we set or we will default you and wreck your credit record. I have had exactly this conversation with them and even referred them to the FOS over their intransigence it makes no difference.
Regarding the minimum payment I think the reason for the increase is probably due to the regulations that came into force last year where you have to pay off at least 1% of the outstanding balance plus of course any interest accrued.
The company you mention is a debt management company. What they do is set up a debt management plan with all your creditors based on the amount you owe each and your affordable income. Strangely MBNA seem to freeze interest and waive charges on these arrangements (usually). If you decide to go down the path of a debt management plan, you can get exactly the same service free of charge from either Payplan or CCCS, they both have web pages, the other companies will charge you a percentage of your payments and really are not a good idea.
My advice (for what it is worth)based on personal experience, and as having been in exactly the situation you describe, is to start a DMP with one of the free companies mentioned earlier, it is only a matter of time before something happens that makes you default, if you are working so close to your financial limit. Far better to face up to it now whilst you have some degree of control, it really isn’t that hard to do, just give them a ring.
Your credit rating will be shot for at least six years, so get used to it but I guarantee you will sleep better at night knowing you are living within your means
KInd Regards
Peter

[keiko1311]

Re: mbna threat to credit rating

My thanks to those commenting, and very useful too.
Further to my first post... mbna have now sent me a letter cancelling my card (and saying that this has been reported to the credit agencies).
Remember that all I did was to send a letter asking for my original contract to be honoured, and then have an (supposedly) off the record conversation with one of their thirteen year olds. I did not make an official application to pay less.

Ah well - this makes the decision about a debt management plan a 'done deal' as far as I am concerned.
keiko1311

[keiko1311]

Re: mbna threat to credit rating

25th October..... now past my allotted life span and having more 'fun' /'trouble' (depends on point of view), with these corporate 'giants'. Now having argument with good old virgin media. On june 30th '11 our tv was switched from virgin to Sky. On July 13th our BT/Sky telephone was installed, on July 21st our Broadband was switched from virgin to Sky.
On 21st I received a 'bill' from Virgin for £99.28....(for charges for 19th July to 19th August), so I wrote back and asked for it to be itemised, and asking them not to remove money from my bank account until they had done so. I received no itemised bill but a reminder to pay, and a shocked comment that I had cancelled my direct debit so they were unable to collect this latest 'bill'.
On 21st September I received another bill BUT virgin had noticed that I had 'changed my package', so had knocked the total down to £75 and coppers.
Since then I have written five letters to Virgin, but to no avail - and no replies or acknowledgements.... but am now being pursued by a Glasgow company for this 'debt'.
This company claim that Virgin can send a 'final account payment demand' up to 30 days after their services have been disconnected....... how convenient for Virgin.
Is the last statement true? I am insisting on an itemised bill and have now written to the CEO's office in Manchester.
Comments anyone????

[MIKE770]

Re: mbna threat to credit rating

25th October..... now past my allotted life span and having more 'fun' /'trouble' (depends on point of view), with these corporate 'giants'. Now having argument with good old virgin media. On june 30th '11 our tv was switched from virgin to Sky. On July 13th our BT/Sky telephone was installed, on July 21st our Broadband was switched from virgin to Sky.
On 21st I received a 'bill' from Virgin for £99.28....(for charges for 19th July to 19th August), so I wrote back and asked for it to be itemised, and asking them not to remove money from my bank account until they had done so. I received no itemised bill but a reminder to pay, and a shocked comment that I had cancelled my direct debit so they were unable to collect this latest 'bill'.
On 21st September I received another bill BUT virgin had noticed that I had 'changed my package', so had knocked the total down to £75 and coppers.
Since then I have written five letters to Virgin, but to no avail - and no replies or acknowledgements.... but am now being pursued by a Glasgow company for this 'debt'.
This company claim that Virgin can send a 'final account payment demand' up to 30 days after their services have been disconnected....... how convenient for Virgin.
Is the last statement true? I am insisting on an itemised bill and have now written to the CEO's office in Manchester.
Comments anyone????

Do as I did go to their site Complaints page send E.Mail to C.E.O and your complaint details including your Account Number, I had a similair problem at that time as well, changing supplier, had response from a Lady Called Wendy who sorted it out eventually although watch the events as after 3rd attempt by Wendy seems sorted.

Do not go through their customer complaints Telephone numbers as it is a call centre who do not know who they work for as when asked them for Head Office telephone numbers was told they did not have one, then passed piller to post so ignore tht aspect.