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Lord D'arcy Pew

Credit card interest 'could be waived' for persistent debt

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The Financial Conduct Authority (FCA) has published proposals that could mean credit card companies cancelling any interest or charges in extreme cases.

Firms would have to work more closely with people in debt, such as drawing up a faster repayment plan.

One debt charity said the plans failed to deal with credit cards becoming dangerous, long-term debt.

The UK Cards Association, which represents credit card companies, said that the plans required "careful consideration".

The regulator defines someone as being in credit card debt if they have paid more in interest and charges than they have repaid of their borrowing over an 18-month period.

http://www.bbc.co.uk/news/business-39476895

Perhaps they shouldn't give irresponsible people the responsibility of credit cards?

 

 

 

 

 

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FFS the terms and conditions are pretty bloody clear if people get into debt on them more fool them, if your gona just write off the debt your just encouraging more spending know you will be bailed out ..

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We're that close to negative interest rates. The FED must continue under Trumps reign to return to normal interest rates.

If we cancel rates to zero on unsecured debt, we're one step closer to negative interest rates.

I.e. if you have £25K debt on one credit card, and we go to -0.5% rate, the credit card bank will be paying YOU interest to keep you spending. As the balance of course, tends toward's zero, then the rate can be in a dynamic, and go to zero and back to positive again.

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29 minutes ago, Lord D'arcy Pew said:

Perhaps they shouldn't give irresponsible people the responsibility of credit cards?

Given the FCA is paid for by the financial services industry, I'm not surprised it failed to point to the moral hazard elephant.

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There are three options.

Option 1.   Re Introduce responsible lending.

Option 2.  Bail them all out and add it to the national debt.

Option 3.  Prosecute the debt pushers for usurary, seize their assets.

 

The Government only has the balls for option 2.

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It sounds like they're trying to introduce an incentive for borrowers to become "extreme cases".

The solution seems to be on along the same lines as small debts it's your problem and big debts it's the banks problem.

Edited by billybong

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I have a little sympathy with this knowing someone that has had the problem.

The issue is that you can get a credit card at (say) 9%. The problem comes if you have a some cash strapped months and start paying minimum sums each month. They now know you are an easy mark and will creep the rate up and up, meaning it becomes even harder to pay off, until you are at 29.9% (I think there is some kind of limit there). It is a slow boiled frog event.

At the same time, zero interest balance transfers will be closed off so they have you trapped.

I personally think that the rate applicable when you spend that money should be the rate that applies until it is paid off. 30% on what is effectively a secured loan (since they can always take your house) is usary.

 

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Why not just ban the things? While I do use one, and understand them to have certain benefits, it's difficult not to see them as unethical financial traps for the unwary.

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Funnily enough received an email today from Halifax, methinks they are well aware of the s**tstorm coming as it mentions (multiple times) the ability to decrease my credit limit, yes, DECREASE!

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Only the take up of new debt is keeping the economy going......If could only spend what earned not a lot of spending and consumption would go on....;)

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I've a simple idea. Instead of waiving the interest how about taking everything they own and not giving them anymore debt.

Of course that would put an end to the banks preferred pusher/junkie relationship that maintains a permanent income stream from it's slave-like customers.

What a dilemma!

Stop bailing out these insanely irresponsible banks. Reform the system to cut them off the governments teat and leave borrowers and banks alike to reap what they deserve.

 

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11 hours ago, 200p said:

We're that close to negative interest rates. The FED must continue under Trumps reign to return to normal interest rates.

If we cancel rates to zero on unsecured debt, we're one step closer to negative interest rates.

I.e. if you have £25K debt on one credit card, and we go to -0.5% rate, the credit card bank will be paying YOU interest to keep you spending. As the balance of course, tends toward's zero, then the rate can be in a dynamic, and go to zero and back to positive again.

This is the only reason they would cancel debts, if it meant the banker scum had to pay you....

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I am seriously concerned that the housing issue is actually just a very small part of everything that is wrong with this country.  Bail out the banks so they can continue to recieve huge bonuses which we pay for, throw more and more money at people and now it seems pay the debts off.

The prisons are a joke and people actually opt to get sent back there because it is easier than living outside ( maybe this could be a new project for the soon to be out of work BTL landlords) hell some of their houses are a lot worse than jails lol.

We also have no motivation for a large percentage of the unemployed to work as we just throw money at them, DLA for drug addicts..............the list I am sure could be added to.

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LLoyds Bank recently swooped on MBNA credit cards, paying some £1.9 Billion.....

20 DECEMBER 2016  http://www.telegraph.co.uk/business/2016/12/20/lloyds-bank-swoops-credit-card-provider-mbna-19bn-deal/

Such moves for credit-cards don't really concern me, even though I am for personal financial responsibility.  

Some forbearance on interest and charges (not principal), is no big deal.  We can afford some forbearance for those in credit-card trouble, in a situation of paying far more back than they ever borrowed. 

It's not houses/mortgages where it's a real commitment in a market.

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