Credit card providers have to check you can afford the credit limit they give you, and check again before putting your limit up. Cards for people building credit, like Aqua, Vanquis, Capital One and Fluid, often started with a low limit and then increased it several times.
Since 2018, card providers have also had to step in if you’ve been paying more in interest and charges than off the balance for 18 months or more (“persistent debt”).
Signs the lending was unaffordable
- Your limit went up while you were near or over it
- You were only making minimum payments for a long time
- You were charged late or over-limit fees
- You had several cards at the same time
- You were using the card for cash or to pay bills
What could you get back?
If a complaint is upheld, the usual outcome is a refund of the interest and charges you paid on the lending that shouldn’t have been given, plus 8% simple interest a year on top, and any negative marks about that lending removed from your credit file. If you still owe money, the refund may be taken off the balance first.
How a claim works
- Complain to the lender. You, or a firm acting for you, write to the lender explaining why the lending was unaffordable.
- The lender has 8 weeks to send a final response.
- If you’re not happy with their final response, you usually have 6 months to take it to the Financial Ombudsman Service. If 8 weeks pass with no final response, you can go to the Ombudsman straight away. It’s free.
You can do all of this yourself: our free complaint letters show you how. Or, if you’d rather not, we can introduce you to a regulated firm that will handle it for you, for a fee.
Is there a time limit?
Usually you need to complain within six years of the lending, or within three years of when you realised (or should have realised) you had reason to complain, whichever is later. Lenders sometimes look at older complaints anyway, and the Ombudsman can decide whether a complaint is in time. If you’re not sure, it’s worth checking.
Lenders
Useful guides: affordability checks · how much compensation · refund calculator
Questions people ask
Do I have to have stopped using the card?
No. You can complain about a card you still have. A refund may be used to reduce the balance first.
What is persistent debt?
If over 18 months you paid more in interest, fees and charges than you paid off the balance, the card provider should have contacted you about it and, after 36 months, helped you clear the balance faster.