Credit Card 5% interest increase

maddyjones

Got letters from two credit card companies saying there were increasing the interest from March 2009 by a whopping 5%. Couldn't believe it considering the base rate has just dropped to 1.5%. Called the customer services who said they couldn't do anything for me other than suggest I close the account which will freeze the interest rate at the current rate.
Got transferred to the account closure department who asked me for my reasons for closing the account. Once I explained my reasons they said they could exclude me from the interest increase, just like that and I didn't have to close the account. Apparently the front line customer services don't know about this nor have the authorisation. There's no other catches and all it took was the call to those in the account closure department!
A result, I think!
:j

IcklePickle_2

That's great, well done. What were they increasing it to?

Some people are getting their interest rates increased to things like 34%!! It seems to depend on your customer profile (whether they think you're risky or not) as to whether the account closure teams will reduce your rate back down again.

clio

be nice to know as well the credit card company involved:)

maddyjones

Credit card companies were The AA (Bank of Scotland) and Halifax, obviously now the same bank. Interest rate were being increased to 19% and 23% respectively, ridiculous amounts considering the base rate - seems they are trying to recoupe money by other means.

lemonade_lifestyle

I got the letter too. Raising APR from 15.9% to 20.95% as of February. I decided to close account too and pay it off at my existing rate.
Called them, put thro to closures dept and hey presto, they have kept my APR at its original figure. They asked if I really wanted to close it, I said no, jobs a good un!!!

Not sure how long this will last for thou:rotfl:

nickmack

maddyjones wrote: »

Credit card companies were The AA (Bank of Scotland) and Halifax, obviously now the same bank. Interest rate were being increased to 19% and 23% respectively, ridiculous amounts considering the base rate - seems they are trying to recoupe money by other means.

Whilst I don't agree with exploiting customers by keep raising interest rates when they have large balance, the APR on Credit Cards has virtually no relationship to the BoE Base Rate. It's usually based on a risk assessment.

There are some measures that have been agreed that seem to be a starting point to a fairer deal though:

http://nds.coi.gov.uk/environment/fullDetail.asp?ReleaseID=387325&NewsAreaID=2