Doubled credit card interest

Stephen58

I owed around £5000 to the a MBNA credit card, and have slowly been paying them off at their standard interest rate of 15.9%. However, two weeks ago I transfered £4000 to a new card offering 0% APR thinking it would help to pay off the debt quicker.

Today I've received a letter from MBNA. They inform me that as from 1st Oct they are increasing the interest on the remaining balance (£1000) to a massive 29.9% APR.

It appears to me that they are 'narked' that I had the nerve to make the transfer, and this is their way of getting back at me & regaining some of the interest that they would of lost. Luckily, I have the £1000 to pay them off and close the account.

My question really is this - is this legal?

There must be thousands of people out there who can't pay this sort of interest charge. It's my opinion that companies like the MBNA should be run out of business, interest at 6x the Bank of England base rate is just 'Daylight Robbery'.
:eek:

exel1966

Yes, they can charge whatever they like, just as they can chose who to give credit to or not.

You will still get your 0% introductory period, but when it ends then the standard APR will rise to 29.90%. The 1st OCT applies to those not on introductory rates.

Stephen58

Thanks exel1966, but I think you have misunderstood.
The transfer was to another credit card company that was offering 0% to new customers. Unfortunately, I was only offered a £4000 credit limit, so could only transfer part of the balance from MBNA. The remaining £1000 with MBNA will incurr the interest at 29.9% if I don't pay in full this month.

exel1966

Oh I see, not so good then. Three possible options ;-

Ask the new card company for an increase to transfer the remaining £1K ? It is possible. Many limits can be increased on request at the card activation stage.
Find another card to transfer the £1K to though you'll possibly pay up to £30 for the privelage of that if they charge a fee.
Pay the £1K as you do have it.

_Andy_

There's nothing illegal about varying the rate of interest on a variable rate credit agreement.

nomoneytoday

It's perfectly legal, but can be annoying if you are on the receiving end..

Richard019

OP has been lucky to get 29.9% from MBNA (who honestly thought they'd ever read that?), most people getting the increase seem to be getting 34.9%.