Please Sign The Petition To PM - Unfair Credit Card Practises

madhusudhan

All

The Petition submitted to the PM requesting to penalize the credit cards has been approved.

Please take few moments to sign the petition titled "Penalize The Credit Card Companies That Rip-off Customers By Unfair, Unethical and Unjustifiable Practices" submitted to PM.

Here's the link:

http://petitions.number10.gov.uk/unfaircards/


The details of the petition are here:

The credit card companies are following unfair, unethical and unjustifiable practices due to lack of government regulations and standards. The practices include increasing the interest rates to 35% or above, negative payment hierarchy and others.
When the livelihood is hard during the troublesome days, the irresponsible acts of Credit Card Companies are making people’s lives even harder.

However, the company behind the above cards MBNA had started hiking the interest rates without any business justification. Many customers rates have been hiked up to 35%.

There is absolutely no justification to these higher interest rates under any circumstances. When we tried contacting the company asking for justification, they wouldn’t reveal.

While the base rate of Bank of England is climbing down, the interest rates on the cards are hiking up exponentially.
To one's shock and horror, the interest rates MBNA charging the honest customers is well above 34%! The company has refused to do reduce the interest rates when customers pleaded their call centres. They have told us that they can do what ever they wish to do as the customer is bound by a variable interest rate contract.


Thanks to you all - please support the campaign.

Madhusudhan

TrickyDicky

Isnt the justification the fact that they're making less money due to the credit crunch? best way to increase profits is the charge more for credit. A good thing IMHO - it may put people off getting too much in debt.

As for not being in line with base rate - credit cards never were, and never have been. They tend to do the opposite.

BenL

There are some new rules from the 1st of January 2009.

http://www.timesonline.co.uk/tol/money/borrowing/article5327461.ece

Does this go some way to sorting the issues out?

Yorkshire_Bred

Wasn't it only last year that store cards were slammed for charging such high interest rates and were forced to put warning on their statements if they charged more than 25%?

normanmark

If people sign up for a variable credit agreement, what do they expect when the interest rate varies?

Paulgonnabedebtfree

I've read thae article. I thought they already gave a months notice of interest increases.
Another thing that needs to happen is that there needs to be a notice period of credit limit decreases. I was lucky I didn't get stranded in Spain. What if my van (my only means of income) goes in for repair and I can't get it out because of a no notice CL decrease? I would be stuffed - that's what.

TheExpert

Tougher economic climate = People having less money
People having less money = More people charge off on their credit cards
More people charge off on their credit cards = more outstandings are wiped out as bad debt
More outstandings wiped out as bad debt = credit card company has to do something radical or go under.

Capiche?

milliemonster

I appreciate from the report that credit interest is variable depending on perceived borrower risk but in reality it isn't variable, it only goes one way, up, I have never know the interest rate on a variable credit card to go down again once it has been increased, despite an improvement in the owners credit rating

Clive_Woody

TheExpert wrote: »

Tougher economic climate = People having less money
People having less money = More people charge off on their credit cards
More people charge off on their credit cards = more outstandings are wiped out as bad debt
More outstandings wiped out as bad debt = credit card company has to do something radical or go under.

Capiche?

Saved me the bother of spelling it out.

jamalfatty

Paulgonnabedebtfree wrote: »

Another thing that needs to happen is that there needs to be a notice period of credit limit decreases. I was lucky I didn't get stranded in Spain. What if my van (my only means of income) goes in for repair and I can't get it out because of a no notice CL decrease? I would be stuffed - that's what.

This will never happen and for good reason which I would think is quite obvious?

I dont know your circumstances but would think that relying entirely on someone else's money to keep your only source of income going is asking for trouble and if that is the case, it would be no suprise if your limit was reduced

Paulgonnabedebtfree

jamalfatty wrote: »

This will never happen and for good reason which I would think is quite obvious?

I dont know your circumstances but would think that relying entirely on someone else's money to keep your only source of income going is asking for trouble and if that is the case, it would be no suprise if your limit was reduced

Well I do realise that they would be concerned about people going on spending sprees if they gave notice of decreased credit limits but surely those people would go on such sprees anyway.
I take your point about using credit to pay for vehicle servicing and repairs. It has been the accepted norm for a long time that businesses generally need some type of overdraft or credit facility to assist through low cashflow periods. However, times have clearly changed. It's a bit of a conundrum really. Instead of building a war chest for unexpected largish outlays, I have been repaying my debts faster than the minimum required. I have regarded that as the financially responsible thing to do. In times where lenders mainly left the credit limits alone, this would indeed be responsible behaviour. As I'm not in a position to build a war chest at a reasonable speed, I'm starting to wonder if it would be more responsible to withdraw funds from a CC and place them in my business account just in case. The idea would be to not touch those funds unless there was a reeal emergency and to repay the borrowings from earned income rather than the borrowed war chest.
It is truely ironic that if I could be sure that lenders would leave my credit limits alone, I would have no need to increase my indebtedness. But because there may be a danger of facilities being withdrawn (even though I have not had a late payment for at least two years), then I may have to borrow more to cover my back while the facility is still there.
It is quite a bizarre situation really. I want to behave responsibly but feel as if I could potentially run into problems if I do so.