Is it possible to negotiate lower % rates for an exisiting balance?

Doublespresso

Hi Kate and welcome to MSE.
Thanks for your question which is probably of interest to a lot of people here.
I do hope that the banks will see sense in trying to find a win/win outcome with their clients, but perhaps others with more experience will contribute to this thread.

@nickmack
Yes, that was the idea, as he has had the card for many years (I think it was a different bank then) he was told that there is a good chance that Citi may not produce a valid one.
I read the thread you pointed to, it has many posts about people trying to get the balance wiped off, (this is NOT what my mate wants to do!) and many posts about the rights and wrongs etc.

Is there a plain, "non judgemental" guide about the whole CCA request issue and the legal aspects of it?
I'm particularly interested in the implication, if any, of going down that route.

GeorgeUK

Here's some information on the CCA requests
http://forums.moneysavingexpert.com/showthread.html?t=578486

Basically, a credit agreement (before April 2007) must have certain prescribed terms on it for it to be legally binding. If the terms are not all there or they cannot produce a copy of the CCA within 12 working days, the debt becomes unenforcable. This may give your friend more room to manouver as the law will be on his side, but getting the bank to see if like that may be a problem.

You have a legal right to request a copy of your credit agreement at any time, so all he has to lose is the cost of postage and £1 fee.

You can have about 3 credit checks in a 6 month period before your credit score is affected so if your friend were to apply for a card and only get a % of the required amount, he would still be better off transferring. This would allow him to put more money towards the higher APR card which would reduce the balance faster and cost him less in interest charges.

Doublespresso

but getting the bank to see if like that may be a problem.

Will they retaliate? I mean, can they hike the interest even higher? Or worse, record something in the credit files which are shared by other banks?

You can have about 3 credit checks in a 6 month period before your credit score is affected so if your friend were to apply for a card and only get a % of the required amount, he would still be better off transferring. This would allow him to put more money towards the higher APR card which would reduce the balance faster and cost him less in interest charges.

Yes, I agree, but wouldn't that increase the total amount of credit available to him by adding yet another CC to his wallet?

GeorgeUK

Having more credit available is not necessarily a bad thing - especially if you are using it to get out of debt rather than to increase your debt. Make sure he understands that he should never use a card that he is using for the balance transfer promotional rate for spending, otherwise any savings he could have made could be wiped out.

If he requests a copy of the CCA, he has a legal right to do so. They shouldn't complain about that. If they are unable to produce a copy or it does not have all the required prescribed terms, then they have a problem as the debt is unenforcable, but if he continues to make payments then again, they have nothing to complain about. Letting them know that he is aware of his rights and intends to pay off the debt, but would appreciate a better rate is not something they should be arguing with. If the debt is unenforcable, he doesn't actually need to pay anything towards it. If he is still using the card then he would have difficulty justifying that in court, but there is definately no problem with him just requesting a copy of the CCA right now.

cavim

MBNA hiked my & my partner's standard interest rates up from less than 20% to over 30% a couple of years ago when we took advantage of 0% balance transfers (MBNA were obviously hoping we'd not pay off the balance transfers before the deadline then have to pay the full rate).

To me, this is immoral/unethical and financial organisations shouldn't be able to charge more than a certain percentage above the bank base rate.
:money: IS THIS SOMETHING THAT MARTIN COULD FOLLOW UP ON SO THAT ANYONE WHO ENDED UP HAVING TO PAY THESE EXTORTIONATE RATES COULD GET (A) A REDUCTION TO A SENSIBLE RATE AND (B) BE ABLE TO RECLAIM EXCESSIVE INTEREST CHARGED IN THE PAST? :money:

In my view, this tactic by the financial organisations is just as bad as PPI mis-selling and is far worse than their charges that can already be reclaimed & for which Martin has provided standard letters for us to use.