Exclusive
SHAKE-UP
Major bank to axe credit card for all customers in DAYS
Plus, we've explained how to find the best alternatives
A MAJOR bank is set to discontinue credit card services for all customers in a matter of days, The Sun can reveal.
Cahoot, a subsidiary of Santander, will stop offering credit card services for all customers next week.
1
Cahoot ceased offering new credit cards to customers back in 2006.
However, over 1,000 existing customers are still using these credit cards today.
Many more may still have a Cahoot card knocking around.
All these credit cards will stop working from September 30.
Read more in money
This means you will no longer be able to pay for goods or services in-store or online with the card.
Customers will need to find another credit card provider to continue to make purchases in this way.
A spokesperson for Cahoot told The Sun: "Following a review of our product range, we have made the decision to close the cahoot credit card account from September 30, 2024.
"We have written to Cahoot credit card customers to outline the options available to them, including transferring to a Santander Everyday No Balance Transfer Fee Credit Card as a replacement."
Most read in Money
If you still have an outstanding balance on your card after this date, you can continue to make repayments as usual - there's no time limit on repaying the debt.
Once you've repaid your balance in full and it's at £0, Cahoot will then close your account and write to you to confirm this.
You won't be forced to pay off your debt in full.
The bank says that all repayment options will continue to be available to affected customers.
Your statement will continue to show the minimum repayment amount required each month.
You must pay the minimum payment on or before your payment due date.
CARD REFUNDS: Section 75 versus Chargeback
The minimum payment is the highest of:
- The full credit card balance if it is less than £5
- Any arrears payable, plus the greater of 2.5% of the credit card balance or £5
Remember, if you only make the minimum payment, it will take longer and cost you more to clear your balance.
This is because interest is added to your outstanding bill.
Martyn James, consumer rights expert, says: "If you’ve got a big debt on your credit card, you might be worried about paying off the bill now the Cahoot card is being withdrawn.
"However, in situations like this, the business should allow you to keep paying off the debt by the minimum payment.
"If you're in financial difficulties, they should set up a payment plan at a rate you can afford – and not charge excessive interest."
Santander says that customers who actively use the Cahoot credit card can apply for a replacement credit card with Santander and complete a balance transfer.
SUBSCRIPTION WARNING
IF you have an ongoing monthly subscription that you pay using your Cahoot credit card, you'll need to update your details now.
From September 10, 2024 any requests for authorisation on your Cahoot Credit Card will be declined.
You need to make alternative arrangements for future payments with each subscription provider or organisation before this date to ensure that services continue and any required payments are made.
If you fail to do this and are paying a contract with a specified term, your missed payment could be reported to the credit reference agencies and may reduce your credit score.
However, Cahoot will also allow customers to transfer their existing credit card debt onto a new credit card with a different bank.
This means those who can't afford to pay off their balance in full could transfer it to an interest-free balance transfer credit card.
These cards allow customers to temporarily stop paying interest for up to 29 months for a small processing fee of 2-4%.
If you want to pay your debt down completely, you should avoid spending extra money on these cards.
With HSBC's market-leading offer, customers can stop paying interest for 29 months, with a 3.49% transfer fee.
Those with less-than-perfect credit scores might be eligible for a 16-month Virgin Money card with a 3% transfer fee.
Those with poor credit scores could be eligible for Fluid's nine-month interest-free balance transfer card, which also charges a 3% transfer fee.
FIND THE BEST CREDIT CARD DEALS
You should always use an eligibility calculator before applying. That's because every credit card application leaves a mark on your credit file and can affect your credit score.
To assess all the available cards, visit price comparison websites like MoneySavingExpert's Cheap Credit Club or Compare the Market.
Once you run your details through an eligibility calculator and you've been shown that you're likely to be accepted, make a formal application.
To do this, you will need to provide your name, address and email address as well as details of your income so a provider can assess your eligibility.
You will also need to provide details of how much money you want to transfer to the new card, but you can often do this after you have been accepted.
READ MORE SUN STORIES
If your application is approved, you will need to transfer the balance within a set period, usually around 60 or 90 days.
Your old balance will then be cleared and you can start making interest-free repayments on your new card.
HISTORY OF CAHOOT
THE Cahoot brand was set up in 2000, becoming Abbey National's internet-only division.
Santander retained the banking division when Abbey National was bought out by the Spanish banking giant in July 2004.
In addition to credit cards, Cahoot provided current accounts but halted new account openings in February 2010.
In June 2015, Cahoot stopped paying interest on current account balances.
Further changes occurred in April 2020 when Cahoot withdrew the interest-free overdraft facility on its current accounts.
The online-only bank now specialises in offers savings accounts.
Topics