My Virgin Balance Transfer ended up at 31%APR

jono2375_2

I applied for a balance transfer via Virgin (MBNA) about 12 months ago, it was a fairly sizeable transfer about £6000. At the time the APR at the end of the 0% period was something in the region of 16%, I have since been notified that this is going to now be almost doubled to 31%. Is there anything I can do and more importantly its being advertised even on this website as a good card to have, but I am worried that this is an introductory hook and then you are trapped and people should be made aware. Any advise and in view of what was on the news today about the interest rate cut being passed on to credit cards.

Any help will be great as the new 31% will cripple me and leave me with a longer standing debt. Because of the size of the balance I am finding it hard to shift the balance or split it else where despite having a good credit score.

cifpower

The contract you signed up to is for a variable APR. As such they can charge what they want. You have three choices:

1 - accept the higher APR and repay accordingly
2 - ring Virgin and ask them to lower your APR
3 - transfer the balance to a 0% card such as Halifax

_Andy_

Of course 0% is an introductory hook. Unfortunately if you agree to a variable rate credit agreement there's nothing to stop the card provider varying it, which is what they've done.
Shop around for a better deal if they won't reduce it.

jono2375_2

Thank you for your replies

I appreciate that its a hook but isn't this quite bad practise for such a branded company ? As stated its even being advertising on here as 16% when in fact it won't be that at the end. Its an advertising tease...If you think about it aren't most credit cards variable rate after the intro period, where would we all be if all uk banks did this overnight ? I do of course appreciate the standard obvious answers, but wondered whether any one else had experience of this and any success stories. There was an article on the bbc website today stating it is extremely bad practise and being referred to the oft ??

http://news.bbc.co.uk/1/hi/business/7749498.stm

cifpower

"Typical APR" means two thirds get the advertised rate

Loyalty

cifpower wrote: »

The contract you signed up to is for a variable APR. As such they can charge what they want. You have three choices:

1 - accept the higher APR and repay accordingly
2 - ring Virgin and ask them to lower your APR
3 - transfer the balance to a 0% card such as Halifax

Correct, In some circumstances, depending on the status of the card we can look to lower the rates. All cards are reviewed on a regular basis by a automated system, which will decide based on the the circumstances of the card ( and holder through silent credit checks) what rate should be on the card.
If your not happy with the new rate, request a reduction. If you don't ask you don't get, just don't demand. Retention staff are limited by company policy and what the system will allow them to do, however being rude will get you no where. if they cant change it....well there are 2 more choices above

storminbalder

I find it hard to understand the number of apologists on here for MBNA/Virgin and what is quite clesrly sheer extortion.

I understand that APR's are variable, but the behaviour of this institution is clearly at the sharp end of practice. In short they are sharks.

31% APR is ridiculous, and I don't quite understand how they think they can get away with it. At least Vanquis and other cards aimed at those deemed less credit worthy don't try to hide what they are and try to hook you into a mountain of debt through what amounts to a falsehood.

I have the greatest sympathy for anyone that unwittingly gets involved with this company.

july73

Anyone else had their APR doubled

I to have been hit with interest increase on my virgin card. I did a thread asking who has received a letter? Yes it's true they can legally put up interest rates and I too understand that APR's are variable but this is sheer extortion and according to consumer watchdog unfair banking practise. Sky news has a feature on it. MBNA are planning to hike up interest rates on all cards apparently by Jan 09 but don't quote me on this.

Like you jono2375 I have had no luck in transferring to another 0% card and sorry to say, though others may have better luck than me MBNA was not interested in helping.

My only solution was to take out a loan. After believing we would only be able to get a secured loan and not get the best deal due to a few applications and one late payment I was surprised to get a unsecured loan to pay off both cards at 5.2%. Though variable I'm paying the same amount each month as I'm on my cards at present that is. The loan is only over 5 years compared to estimated 67 yrs only paying minimum payment on both cards. You get a 3mth start break and can pay off extra at any time to reduce interest and term of the loan. That's the best bit to work towards being debt free by paying a bit more of when we can.

I'm over joyed even though some might argue that this is not the best solution. One loan is paid of in 9mths the other is paid in 3 yrs and of course my recent loan in 5yrs. With the money we will save from both other loans We will be paying into this recent loan and hopefully by not getting any other credit. We will be debt free in less than 5 yrs:j Then we can concentrate on the one debt which can not possibly be paid of in the short term, our mortgage.

Signing up next week for this loan and fingers crossed it all goes to plan.

YorkshireBoy

july73 wrote: »

...I was surprised to get a unsecured loan to pay off both cards at 5.2%.

That's an incredibly good rate. Can I ask who the lender is?

july73

Anyone else had their APR doubled

YorkshireBoy wrote: »

That's an incredibly good rate. Can I ask who the lender is?

Hi

I to thought this was very good. Though on a variable rate I'm sure it won't go up any time soon, as interest rates are going down.

The lender is Black Horse Finance. Apparently they reviewed their policy yesterday. The first offer a few days before was only enough to pay off one card, but now they can help clear the two.
Thank God some companies are finally helping people like me:D and not with sheer extortionate interest rates.

YorkshireBoy

july73 wrote: »

Hi

I to thought this was very good. Though on a variable rate I'm sure it won't go up any time soon, as interest rates are going down.

The lender is Black Horse Finance.

I don't want to worry you, but since you didn't qualify your 5.2% figure as an APR are you sure you haven't misunderstood or been misinformed?

For example, is the 5.2% a flat rate? ie the APR is roughly twice that figure...around 12-13% APR?

Or have you simply divided 26% APR by 5 (years) to get your 5.2% rate?

I'm no loan expert, but taking the current credit crunch, and your less than perfect credit history, into account, frankly I'm amazed you've managed to get a 5.2% APR loan over 5 years.

Don't mean to offend...just want you to go in with eyes wide open!