Why do bank want to cancel my Laser card?

[marian30]

Hi, I'd really appreciate some advice.

I'm unemployed and have debts totalling almost €8,000, most of which is a personal loan. There are things to show for this, a car, loads of driving lessons, a college course... The amount has crept up slowly over a few years when I used to get consolidation loans any time the credit card was maxed. Probably €1000 a year since I left full time education.

I contacted the bank to ask if I could restructure the payments because repayments on this are €90 a week (loan over 2 years) Household bills are €50 a week so all that's left is around €60 to buy food and absolutely anything else that's needed. The budget is just too tight and causing me immense stress.

I have NEVER missed a repayment and I've had this low level debt ongoing for years. €8000 when you are unemployed is obviously a lot of money but I own my house, have the deeds (inheritance) so while cashflow isn't happening my situation isn't that bad. I expect my credit rating is excellent.

In order for the bank to restructure the debt over 5 years they want to cancel both my credit and laser cards. I feel this is extremely harsh considering I'm a homeowner, never missed a repayment ever and I contacted them myself in an attempt to improve my situation.

I want to keep the credit card even with a very low limit because some purchases are cheaper from websites. I think it will be much harder to qualify for a credit card from now on so it would be more beneficial long term to keep it.

I cannot understand why they would want to cancel the Laser card, I can't use that to run up debt.

I plan on saying no to the offer so I can keep my cards. I could get a job in a few weeks and then I'd be ok again. As I said I haven't missed any payments and I contacted them myself so I feel this is extremely harsh, like they are punishing me for something. I assume the top bankers who caused the financial mess still have their laser and credit cards.

I'm not even using the cards because I'm on such a tight budget. My main reason for refusing the offer is I'm afraid of not getting the cards back easily even if I get a job. A lot of the jobs I'm looking at are part time. When working I want the credit card for booking flights, hotels, it's difficult to do anything without a credit card.

I can't see a problem with having a laser card when I can't use it to run up debt so why are they so keen to take it off me?

I'm thinking of contacting MABS and trying to get the interest on the credit card stopped instead. I feel that if I allow them to cancel my cards the lower repayments will ease the financial pressure for a few weeks but could be a disaster long term. If I endure the tight budget for a while longer it will hopefully work out better long term.

I know there are many situations much worse than this being presented to the banks at the moment so I can't understand why they are being so harsh on me. A friend I spoke to today has an overdraft of €20,000 for his small business. It's at the limit and he's holding back cheques until he gets more income. If they were to look at my account properly they would see the direct debits for gas, esb, phone, internet, tv licence, car insurane, house insurance, refuse collection. I feel like I'm being treated like somebody with a shopping problem.


Any thoughts on this appreciated.

Thanks in advance.

 

[bleary]

I'm unemployed and have debts totalling almost €8,000, most of which is a personal loan. There are things to show for this, a car, loads of driving lessons, a college course... The amount has crept up slowly over a few years when I used to get consolidation loans any time the credit card was maxed. Probably €1000 a year since I left full time education.

In 8 years (1000 euros a year) you haven't made any inroads into your debt just added to it. Now you want to reorganise your payments again? I think they are showing their faith in you (and your assets) by offering a loan. The credit card won't be a problem if you have a regular income and reduced debts in the future. Maybe this isn't common anymore but I know some friends who had to relinquish their cards a few years ago. No problem getting one again once they lowered their debts. Also you can get a 3v credit card buying the credit before using it.

 

[Setanta12]

You're presently surviving on c€200 per week - almost half of which is going on loan-repayments.

You speak of keeping your credit-card to pay for flights.

I suggest you get both the loan and a full-time job (even if only as an interim measure until you've things back on track). Forget flights, holidays etc. You will be paying off your new loan and while the new repayments may not be as excessive as they currently are - they will no doubt eat into your weekly disposable income quite considerably.

 

[Welfarite]

From what you say, it is the credit card that has caused you to build up the debt. I'd be thanking them for taking it off you! If you are serious about tackling your debt, then this is the way to go. The bank aren't doing this just for the heck of it. They have made a judgement call that you will manage better without cards, working on cash only.

 

[marian30]

Thanks for the replies.

Maybe this isn't common anymore but I know some friends who had to relinquish their cards a few years ago.

Really? I tried to lower my limit a few years ago and they couldn't even do it in branch. They wanted me to contact the credit card division of the bank. When I did that they still didn't want to lower it, they actively discouraged it. A few years ago banks really wanted people to have credit cards with high limits.

Should they not have lowered the limit every time I consolidated the loans in the past?

You're presently surviving on c€200 per week - almost half of which is going on loan-repayments.

You speak of keeping your credit-card to pay for flights.

I can live on a tight budget, for most of the 8 years I haven't had a high income. When I did have a better income I reduced the debts but they crept up again.

I don't have any plans to book flights, haven't been anywhere in ages but I have family in London so I visit sometimes. I don't mean holidays or long haul flights, just the odd ryanair flight.

From what you say, it is the credit card that has caused you to build up the debt. I'd be thanking them for taking it off you! If you are serious about tackling your debt, then this is the way to go. .

I totally accept that. The limit on the card is €2,500. I want to keep it with a limit of €200. That is not unreasonable in my opinion. I want to keep it because I don't want to cut off my access to internet shopping. I don't mean clothes and holidays but almost everything gets done online these days and I don't want to loose the facility. Students have higher limits on their credit cards than that.

Can someone explain about the Laser card? I can't understand why they would want to take that away when it can't be used to run up debt? I can do without it but I don't see why I should let them cancel it when I don't even understand why. I at least want a good explanation.

Whoever said I should be thankful the bank is offering me a loan, maybe but I owe them all this money already so it's not really a loan, it's just a re-structure of an existing loan. It's probably beneficial to them to ensure I don't miss payments.

I'm not thankful to them at all really because they made it easy for me to run this debt up. I certainly admit choosing to borrow money for a car, an evening college course, driving lessons but every time I did borrow they offered a bit extra to what I asked for. I should have said no but the bank should have been more sensible. I know there are many people who would agree.

 

[Diziet]

I'm not thankful to them at all really because they made it easy for me to run this debt up. I certainly admit choosing to borrow money for a car, an evening college course, driving lessons but every time I did borrow they offered a bit extra to what I asked for. I should have said no but the bank should have been more sensible. I know there are many people who would agree.

Presumably they did not point a gun to your head and make you take the money? Your poor financial decisions are your problem, not the bank's. I know in the good days consolidating loans was easy (although consolidation is generally an astoundingly stupid idea) but really, blaming the bank for the situation you find yourself in now really takes the biscuit.

 

[marian30]

Of course they didn't point a gun to my head BUT borrowing was actively encouraged in the past. Organise a loan over the telephone anyone?People will argue that the banks had a responsibility to protect their customers from the situations they now find themselves in.

Can I assume people defending the banks work for the banks as public opinion is very much against the banks these days.

I'm making the point about the irresponsible lending for other people in much worse situations more than for myself. I have a few things to show for the debt plus I was living on a very low income for a while so I don't feel too bad about it.

I've read the other threads here and I seem to have less debt than others plus I own my home so I'm not that worried for myself. I have no children.

What I really want is for someone to explain about the laser card?

Thanks if anybody can and thanks to everyone for replying to me.

 

[moneyhoney]

This totally depends on what bank you are with but a laser card can be used to run up an unauthorised overdraft - that may be why they want you to get rid of it. I know with AIB that you can put through transactions on your laser card when their isn't enought money in your a/c to cover.....as their Laser platform isn't online and doesn't check to see that there's money there - this was at least the case in the past but I'm not sure about now & the situation with other banks.

 

[Spring09]

Hi Marian,
Depending on what type of Laser Card you have..if you can an online card there is no credit risk you can only spend what is in your account..if you have an offline this is where there is credit risk, no check for funds is carried out at retail points apart from the ramdon checks that can occur. I cannot see the need for them to take your laser card, understand the credit card as there is always the risk you could run debt up again. Speak to your branch again and see if they are willing to restructure without removing your laser..its in your best interest to use laser as accross the counter transactions are more expensive 30 cent per trans v's 20 cent automation.

 

[Setanta12]

Of course they didn't point a gun to my head BUT borrowing was actively encouraged in the past. Organise a loan over the telephone anyone?People will argue that the banks had a responsibility to protect their customers from the situations they now find themselves in.

Can I assume people defending the banks work for the banks as public opinion is very much against the banks these days.

Banks will lend, as shopkeepers will sell cigarettes. Why must you think that either/both must protect their customers ?

 

[Diziet]

...People will argue that the banks had a responsibility to protect their customers from the situations they now find themselves in.

Can I assume people defending the banks work for the banks as public opinion is very much against the banks these days.

...

In my case, you assume wrong. I have never worked for a bank, but I do know that banks are not your friend. You have responsibility for your actions - banks are there to make money for their shareholders (they failed miserably in this respect of course, but that is another story). Public opinion is against banks alright, but that does not mean that carrying debt for years on end is a particularly bright idea. The bank want your cards because your ability to pay is limited, and they don't want you to be able to run up an overdraft. Believe it or not, they are helping you out.

 

[skrooge]

While I have sympathy for anyone that finds themselves in financial difficulty people have to take responsibility for their actions (and their finances).

There is a frightening mindset in this country that when it comes to personal financial decisions the banks make the decisions for us. No one knows what I can and cannot afford better than me. While I fully except there are circumstances beyond my control (such as employment status) I still act responsibility. Banks are here to make a profit while providing us a service. We may not be happy with that service sometimes (might see the odd post about that on here) but it still doesn’t give us the right to hold our hands up and call foul because we personally get into a spot of financial bother

For the OP the credit card limit is not an issue. What you spend on your credit card is. If you only want to spend €200 a month then only spend €200. It doesn’t matter what your limit is. What is required is willpower.