Credit Card - Confusion

[bednobs]

I have a credit card with (what I consider) to be a relatively low amount on it, for which I've been paying the minimum each month. At the beginning of the year, they wrote to me to say I should pay more off each month as it would take a considerable time to clear it blah blah. They have a point, so I stared paying an extra £20, £10, whatever I have spare in the month.
Yesterday I received a letter from them saying how I stil;l wasn't clearing it quick enough and they would review again in 6 months, and if I hadn't got it down, they would lower the credit limit, or take the card back Fair enough, I rarely use it but am paying off a big purchase made in 2018.
My confusion though is that isn't their whole raison d'etre to make money from me like they are doing? Why are they getting their knickers in a twist about it, that's their entire business model!

[jno]

presumably they're scared you'll run into debt and not be able to pay it off, especially if the amount owed is steadily rising? They get a kicking for "letting" people run into debtso I suppose it's partly covering their own backs.

[bednobs]

I guess so, but it's not rising, it's coming down

[jno]

PS if it's just the one amount and the money you owe is falling, then you might be able to get in touch and explain your position; you can't be alone.

They make money from the retailer as well as from customers so you're not entirely personaally responsible for their global profit margins.

[bednobs]

I don't really have a "position" to explain - I pay off what I can when I can, and have never not paid the minimum

[Hopkirk]

It's an expensive way to borrow. Have a word with your bank. They might give you a loan to pay it off, at a lower rate than the card charges you.

[Jackdaw33]

Paying just the minimum is fatal. It will barely cover the interest and leave little or nothing to come off the capital.

[bednobs]

it's small (ish) - to me anyway- so not particularly interested in getting a loan etc, (I could probably save up for a few months and pay off the entirety) i'm just wondering why they are so arsey about it as it's how they make their money!

[bednobs]

"Paying just the minimum is fatal. It will barely cover the interest and leave little or nothing to come off the capital."
I know, but what I don't get is why they care - they are making money from me this way

[Canary42]

Form letters such as you received are computer-generated using an algorithm. If your circumstances are relatively rare, the algorithm can be insufficiently complex to cope so the letter gets churned out anyway. Computers don't wear knickers ;-)

[AuntPollyGrey]

worth a read for the explanation:

https://www.moneyadviceservice.org.uk/en/articles/persistent-debt

[bednobs]

thank you - very helpful :)

[AuntPollyGrey]

Have you thought about finding a zero interest credit card and transfer the balance? Its a fairly easy process and the card will get paid off much quicker.

[bednobs]

Amazon.co.uk User Recommendation

[bednobs]

whoops, wrong thread!

[THECORBYLOON]

"My confusion though is that isn't their whole raison d'etre to make money from me like they are doing?"

Lenders don't profit from everyone since not everyone repays their loans in full. The lenders can sell their debts, at a loss, to other companies who will then try to recover the amount owed.

[jno]

I was wondering if, in the worst-case scanario that they suspend your card, it would count against you on your credit rating. It might be a factor if you ever applied for another one.