I received a letter from Barclaycard recently:
Following a review of our existing accounts, the decision has been taken to withdraw your Barclaycard credit facility. This decision was taken due to the fact that your account does not meet the organisations [sic] new assessment criteria. Unfortunately I am unable to discuss in any detail the criteria concerned with your closure as it is company information and as such is confidential.
I was quite surprised, to say the least! Is there any way how I can find out why this decision was taken? I am not really bothered to get them to change their mind, but I am curious why they've done this out of the blue? I've made a late payment on perhaps two occassions, but apart from that my business with them is always in good order.
Surely the bit they write about "not being able to discuss in detail" can't be right? I was as much party to this credit agreement as what they were, and as such I should have a right to such information, no?
Will this have any impact on my general credit rating?
Ask yourself this:
Do you pay the balance in full each month?
If so, you arent making them any money
Do you have alot of other credit facilities (cards) with availible credit or at limit?
If so, you may be seen as a risk to them
Do you pay the balance in full each month?
If so, you arent making them any moneyAssume:
2,000 credit limit
1,000 monthly spend
1,500 average balance
1.5% merchant fees
Fees income:
1,000 x 0.15 x 12 = 180
Profit:
180 return on 1,500 'risk' is a 12% gross profit...and of course there's always the chance of a bit of interest and the odd late payment or two.
deza, speculate for us - why do you think they might have terminated this card?
Have you got lots of debt elsewhere?
Lots of other cards?
CCJs?
Tried to reclaim bank or CC charges?
Don't use the card?
Someone else has used the card fraudulently?
Etc, etc, etc.
It could be any one of dozens of reasons. What do you reckon it could be?
Assume:
2,000 credit limit
1,000 monthly spend
1,500 average balance
1.5% merchant fees
Fees income:
1,000 x 0.15 x 12 = 180
Profit:
180 return on 1,500 'risk' is a 12% gross profit...and of course there's always the chance of a bit of interest and the odd late payment or two.
Well assuming is not really very good..
If you pay off the balance every month, and your monthly spend is 1000, how can the average balance be 1500?
Well assuming is not really very good..
If you pay off the balance every month, and your monthly spend is 1000, how can the average balance be 1500?
Hmmm, YorkshireBoy is the most experienced person in the field of Credit Cards that I know.
He is quite correct in that if your monthly spend is 1000, then your balance is likely to fluctuate between 1000 and 2000 allowing for the time provided to settle the card in full (up to 59 days interest free credit remember). On this basis the average balance is likely to be around 1500.
There is no problem with YB's assumptions, it is merely a hypothetical example.
Meh if you say so, still, 180 is hardly going to touch the sides on the write off sheets.
Meh if you say so, still, 180 is hardly going to touch the sides on the write off sheets.Write off sheets? :confused:
...and 180 is not the important figure. 12% gross profit (as a minimum) is.
"YorkshireBoy is the most experienced person in the field of Credit Cards that I know."
Surely you must know that companies have to write off debts due to case of fraud, or if a customer dies and has no estate.
What im suggesting is that 180 is nothing given that the average customer doesnt not pay off their balance each month, Credit card companies will look for a much higher return than just Merchant Fees.
Note that OP hasn't replied, so we've got no way of knowing how much gets spent on this card each month, or how much he repays.
If Barclaycard have decided they no longer want to do business with you, then that's there decision and there's alone. They don't owe you any explanation.
What im suggesting is that 180 is nothing... Again, 180 is not the important figure. The 12% gross profit is the important figure.
Another example:
Assume I transfer a balance (at 0% for x months) and don't repay it all within the introductory period so I'm left with an interest-bearing balance.
If the APR is 15.9% then that's roughly the provider's profit isn't it...15.9%
Now that's not a million miles away (in percentage terms) from the profit generated by the customer who uses his card each month and settles in full.
However, don't forget they only made a 3% profit from me in the first year (for the BT fee charged).
So, and very simply, the customer who repays in full makes them an average 12% p.a. over two years, and the BT customer makes them an average 9.45% p.a. over the same period.
If the APR is 15.9% then that's roughly the provider's profit isn't it...15.9%
Isn't this what started the whole credit crunch problem? The lender clearly won't be making a 15.9% profit here as they'll be borrowing the money to lend from someone else. But anyways irrelevant as the OP is clearly a troll so this thread should be shut down.
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