UK's Metro Bank Retail Cards Will Stop Working On September 10: What Happens To Your Credit Card Debt?

Metro Bank, a retail and commercial institution, is set to discontinue its credit card services for tens of thousands of customers within weeks. Starting in September, the bank will no longer offer credit cards to new applicants. Existing personal credit cardholders, who currently benefit from an 18.9% interest rate and no fees, will find their cards unusable beginning September 10.

From that date, cardholders will be unable to make in-store or online purchases with their Metro Bank credit cards. This move follows the bank's recent implementation of fees for debit card transactions outside the UK and the discontinuation of its seven-day branch services earlier this year.

Metro Bank Pulls The Plug On Personal Credit Cards

Metro Bank's business credit cards and all overdraft facilities will remain unchanged. "Withdrawing the retail credit card is the next step in Metro Bank's commitment to simplify its operations and streamline lending activity," a spokesperson for Metro Bank told The Sun.

"Retail cardholders will continue to be able to use their cards until September 10, 2024," the spokesperson added. Customers will need to secure a credit card from a different provider to continue purchasing using this payment method.

If the card has an outstanding balance after the cutoff date, repayments can continue normally without any time restrictions. Once the balance is fully repaid and reduced to £0, Metro Bank will close the account and notify you of this action.

There's no requirement to settle the entire debt at once. The bank assures that all repayment options will remain accessible to impacted customers. Customers will continue to receive monthly statements and have the flexibility to make one-time payments, set up or modify direct debits, and establish payment plans.

Your monthly statement will continue to specify the minimum payment due. This minimum amount must be paid by 4:00 PM on or before the designated payment due date. The minimum payment you must make each month is determined by the higher of these two amounts:

1. £20 (or your total balance if it's less than £20)
2. Total fees for the month, plus 5 percent of your outstanding balance

It is worth noting that paying only the minimum amount will extend the repayment period and increase the overall cost of your debt. "If you've got a big debt on your credit card, you might be worried about paying off the bill now the Metro card is being withdrawn," consumer rights expert Martyn James said.

"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," James added.

Metro Bank, which aimed to become the "Apple" of banking just six years after its inception by Anthony Thomson and Vernon Hill in 2010, will also permit customers to transfer existing credit card debt to a new credit card.

This enables those unable to repay their balance in full to transfer it to an interest-free balance transfer credit card. These cards provide customers with a temporary interest-free period of up to 29 months for a small processing fee ranging from 2 percent to 4 percent.

"For people considering moving their debt for an interest-free deal with another credit card provider, there are three things to factor in: the interest-free period, the transfer fee and the APR if you can't pay off the debt in time," Martin noted.

"But those who make careful use of interest-free deals can comfortably clear all their debt quickly and without the extra cost of interest."

To expedite debt repayment, avoid incurring additional expenses on these cards. Tesco Bank's industry-leading offer provides customers with a 29-month interest-free period and a 3.49 percent transfer fee.

Individuals with less-than-perfect credit scores might qualify for a 16-month Virgin Money card with a 3 percent transfer fee. Those with poor credit scores could be eligible for Fluid's nine-month interest-free balance transfer card, which also carries a 3 percent transfer fee.

It's worth noting that six primary factors can contribute to a decline in credit score despite timely payments.

Your Perfect Credit Card Match

It's highly recommended that you use an eligibility calculator before submitting a credit card application. Each application leaves a trace on your credit file, potentially impacting your credit score.

After confirming your eligibility through an eligibility calculator, submit a formal application. This requires providing your name, address, email address, and income details so that the provider can assess your qualifications.

In addition, you will need to specify the desired transfer amount, although this detail can often be provided post-approval. Upon approval, you'll have a specific timeframe to transfer the outstanding balance, typically 60 or 90 days. Once the transfer is complete and the old balance is cleared, you can initiate interest-free repayments with your new card.