My Debts & Various DCA's & Letters

[NitrousOxide]

OFT definately, it's further borrowing.

[NitrousOxide]

if you used a credit card to make a payment it would be covered under an existing limit (agreement) else it would bounce

 

a debit card is no different to cash or a cheque and is a payment from your bank account and again would not be classed as "further borrowing"

Debit card no but credit card is a yes.

[NitrousOxide]

Hi,

I was in discussion with the OFT about this very issue about 3 years ago but they never gave their final answer as they were quite busy. I may write to them again to get a response.

If you had a debt of say £500 and paid it on a credit card, it will be significantly higher than £500. This is because you pay interest on the credit card which is also usually much higher than if the original debt was a loan. If the original debt had no interest (i.e. was a utility bill) you will now pay interest if paying by credit card.

Also if you only ever pay the minimum amount on your card it compounds the amount you pay and can be quite shocking.

I don't have the email anymore but the OFT said basically because a card is issued under the consumer credit act it is considered borrowing.

Actually I will write again, this has spurred me on to do it.

 

EDIT:Remember a card is not fixed term credit either.

Edited June 24, 2009 by NitrousOxide
Extra line

[NitrousOxide]

If you owe nothing on your Credit Card and you use £ 500 of your credit limit that is FURTHER borrowing. At least it was when I went to school.

 

Before you borrowed the money from your credit card you didnt owe anything on your credit card. By using the £ 500 you have in fact borrowed more money. You now owe it to a Credit Card company instead of the DCA. Its no different from going to a friend/parent/lover and asking for the loan of £ 500 to pay off a DCA who is sending threatomatics to you.

Plus interest on top.

 

and if you paid it back out of your bank account (becuase you used the card for convenience) before the interest is charged then that is called managing your money!

 

i have learned on this forum that there is a time , having made your point to shut up otherwise a discussion turns into an argument

 

that time has come for me on this thread

It's apples and pears really.

You are correct when reffering to debit cards as it's usually your money from your own bank account (not including overdrafts).

However it is generally accepted that using a credit card is further borrowing.

[NitrousOxide]

I think that is the bit that would apply to suggesting peeps pay by credit card.

Exactly. Like I mentioned a credit card is rolling credit and each time it's used you are extending your credit.

[NitrousOxide]

Letters like,

"You have 7 days to pay or (insert threat here). Please phone 0890 xxxx and pay by either debit or credit card".

That's a threat. A threat of legal action.

Using a credit card is borrowing. Pay a £500 debt off and the amount you pay back will be higher.

 

EDIT: Mind if I include this thread as part of the argument to the OFT? I will remove pointless posts and concentrate on the good arguments.

Edited June 25, 2009 by NitrousOxide
EDIT: