Rate Jacking Article Discussion

liquidstool_2 · 4 November 2009 at 9:15AM

Hey all,

i had one of those letters a few weeks ago and was flabbergasted; it read something like "due to the economic downturn we're gonna raise your rate by an incredible 9.94% even though it's not your fault, you've got an excellent credit history blah blah blah"

I phoned them and told them i wanted to shift my debt to a new card with a fairer rate, currently it's 30% as it's one of those rebuild credit rating cards. They said i'd have to re apply, i said that was unfair as it'd leave a footprint, which was the last thing i needed, my circumstances had changed to the point that i'd get turned down anyway. I told them to shove their new rate and terminated my card. There was only £300 on there anyway so at least i won't get hammered with a 40% interest rate!

Fossildog · 4 November 2009 at 12:25PM

Hi. There is reference on here to the ability to 'freeze' the interest rate on a CC (new government legislation?). Has anyone got any further information on this or could you direct me to where I can find out about this?

izools · 4 November 2009 at 12:32PM

Fossildog - if a credit card provider increases your APR you have the option, under the new legislation, to "Opt out" of the increase, and pay off the balance at the old interest rate.

As regard to freezing interest altogether, credit card providers only do this for people that can't meet the minimum monthly payments and have fallen behind, and can prove they are under financial hardship. This affects the cardholders credit rating.

Having said that some credit card companies won't freeze interest even if you are in financial hardship so one may need to stop paying until the account defaults, if they want out of paying interest. (I remember this with my Halifax One card; bunch of w@nk3rs)

Fossildog · 4 November 2009 at 12:39PM

Hi, Thanks for the quick reply. I was never given the option of agreeing to the increase or opting for a 'freeze' at the old rate. They basically just upped the rate. Have you got any details of the legislation or a link where I can read up on it?

ceefercat · 4 November 2009 at 1:36PM

Hi
In July I had a letter advising me that the Goldfish card rate would rise to 25.9% but I could close the account before my October statement and keep the rate at 21.9%. I did this but my latest statement shows the rate as 25.9%. I phoned Goldfish to query this, only to be told that there was a letter sent to me but no record of me being offered the choice to keep the rate at 21.9% if I closed the account. There is a record of closing the account - I did that then because I had seen Martin on GMTV and he advised people to ask why they had been penalised, so I did that and was told that certain customers' credit rating had changed but couldn't (wouldn't) say any more than that.
Because I closed the account successfully I didn't keep the letter and Goldfish now deny the terms of the letter. I've read the article, so I know that Goldfish (Barclaycard) is in the wrong, but how do I prove that I was offered the option to close the account and keep the 21.9% rate?
Julie

Bunnie1982 · 4 November 2009 at 1:50PM

Spent 10 minutes on the phone to Capital One who were trying to persuade me not to Opt Out of the increase as it would mean I wouldn't be able to use my card blah blah blah. Well as they are putting my interest up to nearly 40% after I have always paid on time and not used my card for ages, I don't see the point of staying with them.

Cell · 4 November 2009 at 7:56PM

Fossildog wrote: »

Hi, Thanks for the quick reply. I was never given the option of agreeing to the increase or opting for a 'freeze' at the old rate. They basically just upped the rate. Have you got any details of the legislation or a link where I can read up on it?

http://www.choosingandusing.com/resources/documents/CreditCardFactsheet.pdf

spajec · 4 November 2009 at 10:15PM

How about this for rate Jacking:

Got an Abbey credit card in Feb 2008 with a £2000 limit and balance transfers at 0% until January 2009. So transferred £1900 from higher card.
Balance at end of 0% period was £1712.72 and interest rate was 15.9%
In May 2009 rate was increased to 21.9%
I have now recived a letter advising interest rate is now going to be 29.9%.
Current balance is £993 ; so I've paid off £850 since January 2009.
I rang Abbey and there is nothing they can do to reduce the rate so have stopped card and will pay off the rest as soon as possible, at the 21.9% rate .
Their letter states that the rate change is made following a review of how a customer manages their account and using data provided by our credit rating agencies ( for example Experian).
They are liars. I've paid off well over the minimum each month and checked my experian report and they checked nothing.

I know I am responsible for all my debts but The big boys are ripping us off and making it impossible to get out of debt.

I'm now worried about the other 6 cards I have and what they will do next.

At least by reading these forums I know I'm not alone.

jimmywx11 · 5 November 2009 at 1:25PM

no_cally_doe wrote: »

Without it sounding like everyone is ganging up on you jim boy. There are points that I agree on with TFD.

Your right that's its not fair hiking up the rates as they wish but if you took out the product then you would have had to agree to the terms and for that the responsibility lies with you not the company. If I say to you I'll give you an apple for three apples in return, however I want to change my mind if i wish and you agree to my terms then I'm gonna take as many apples as I can and make me an apple pie, and apple sauce and freshly squeezed apple juice.

If you go against our agreement then I've lost the apples I was needing to make the pie so some joe who honours his apple commitments is gonna have to give me more apples regardless of his loyalty otherwise all I have is pastry!

Comprende?

For some strange reason I really want an apple just now

Please could you explain your apple analogy again please, I don't understand it.

Its seems your saying that, if you go around stealing as many apples as you like. People should give you more apples or you will not have any apples. !? Which to my mind backs up my point. if these companies worked within FAIR rules, companies could make a profit AND consumers could manage thier debt - and therefore have less defaults..... keeping the money sloshing around.

Look how the people on this thread are being treated.....
***** doh i can't post links ******

Has Capital One increased the interest rate of your Credit Card? Please let us know

How you can stand up for these parasites amazes me...

ginnygee · 10 November 2009 at 5:20PM

I have received a letter from Capital One with regard to increasing the interest on my credit card. I recently transferred quite a substantial amount of money onto this card at a very good rate (it was either 3.something or 4.something - haven't got the info with me) which was not a special offer, i.e. 3.0% for 12 months. I was told that it was a variable rate until the balance is paid off. I don't use the card to purchase items or for cash withdrawals. They are stating that the balance transfer rate will be increasing to 10.45% variable.

I am presuming that if I 'opt out' of the card, my interest rate will remain the same as it is now until I pay it off, which would be a good deal for me. However, I do have a high credit limit on this card and have always used it for balance transfers (which previously have been fixed at around 8% until paid off). A rise of around 2.5% is not as high as some of the details in the postings on this site but I am still not happy about it. However, this card does come in handy for balance transfers and I can't quite make up my mind whether to opt out or stay at the new rate.

Does anyone have any words of wisdom please?

Regards

Ginnygee

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