I have the urge to learn more about options on how to settle spiraling credit card bills and unpaid loans in Abu Dhabi or UAE in general because of my previous post, the “How to Settle Overdue Personal Loans or Credit Cards in Abu Dhabi?”. It is one of the most visited posts in Frugal Expat.
The search engine terms (words that people used which led them to my blog) in the statistic page are varied but rooted in the same subject – how to settle overdue bank loans and credit card bills to avoid being locked up in jail.
I am receiving overwhelming response and queries which I am happy because somehow the Frugal Expat serves its purpose – to help others.
On the other note, I cannot help but conclude that a significant portion in the expat population here in UAE is going through such predicament. Such response, queries and search engine terms reflected a cry for help or enlightenment on their plight. So, I decided to take further this particular topic hoping that this will help those who are trapped in this kind of situation.
In today’s post, this is about settling unpaid HSBC credit card bills. Payment policies differ from bank to bank thus this information will not be applicable in all cases.
According to the woman I spoke in the payment plan department of HSBC in Dubai, the cases of delinquent payments are generally taken to their legal department once you fail to pay for three consecutive months. Prior to this, you will receive incessant phone calls from their collection department. If you continuously ignore their calls in your mobile phone, then they start to call in your office number.
The feedback I heard is that they are very polite in dealing with your issue compared to other banks. There are no yelling and harsh words. They explain politely the consequences of missing the payments though very persistent in insisting to make an immediate payment.
Just a word of advice. It is better to always cross-check the information you obtain when inquiring in their toll free number. I first heard about the payment plan for HSBC credit card holders last year from a friend. Curious to know more about this option, I called the HSBC toll free number to inquire. The customer service agent advised me that this option is only available for delinquent payers.
Honestly, I found it ridiculous and I could not fathom the logic behind it. I even reacted sarcastically to the customer service agent and uttered that therefore HSBC credit card holders must wait first until they reach that ‘delinquent’ stage before they can avail this option.
It doesn’t make sense because no one knows better your financial condition but you. If you come to know that you will be laid off in the next two months, then you will certainly look for options to avoid legal consequences, right?
Anyway, a year after that phone conversation with the HSBC customer service agent, I managed to source the telephone number of their payment plan. I spoke to one of their staff who advised that the customer service agent had given me the wrong information.
In fact, any HSBC credit card holders can apply for payment plan (even if you are not a delinquent payer) however it will be subject to approval of the management.
So what is payment plan? If you hold HSBC credit cards and are unable to continue regular payments for whatever reasons, you can opt for the payment plan. It means that the bank will consolidate your HSBC credit card bills and convert it into a sort of personal loan.
Generally, unpaid monthly credit card bills will incur fees for late payment, finance charges, over limit and so on. The more you delay the payment the more the charges escalate.
In payment plan, they will close your account and top your outstanding balance with 6% interest rate. Then you can discuss the timeframe of the payment and your capacity to pay regularly without fail. Accordingly they will advise you of the fix amount which you will pay on monthly basis until the amount is paid off.
There are few things to remember when applying for payment plan for your HSBC credit cards.
Liabilities vs. Monthly Income
The bank will weigh whether you can commit to pay monthly the agreed amount. Therefore, they will calculate your expenses and other liabilities against your monthly income. The difference must at least justify your ability to pay religiously and to spend on your basic needs.
The bank will require you for initial payment which they refer as ‘pre-qualification payment’. It is usually equivalent to two months of the agreed monthly payment. According to them, it is their way of gauging your commitment to go for the payment plan and they will proceed only with your application for approval unless the initial payment is made.
HSBC will require you to submit salary certificate, passport and visa copy, one security check and supporting documents of your existing liabilities (i.e. statement of account).
Lastly, HSBC urges you to pay regularly and failure to do so can breach the agreement though I am not sure the consequences for missing any payments.
I hope that the above info helps you one way or another.