Jumping credit card APR

sweetbutternut

I have a credit card debt with HSBC of around £6000. I have tried so hard to transfer the debt to other credit cards or to other loans with different companies and with HSBC themselves, but because I have a bad credit score and am self-employed, I keep getting rejected.

In the meantime, HSBC keeps raising the APR on my credit card. In fact, it was shortly after I enquired about transferring the credit card debt to a loan with HSBC, that they raised my APR from 18.9% to 21.9%! Can they do that? Just raise the APR on a "whim"? What if they decide to suddenly raise the APR to 30%? I would just have to grin and bear it!

Any ideas on what I should I do?

posted_2

Try and pay it off? Yes they can change the rates, unfortunately.

sweetbutternut

Yes, I'm trying my best to pay it off, always pay beyond the minimum sum. But it's such an uphill struggle especially when they keep raising the rates. I wonder if I'll ever be able to pay it off.

thriftymomma

Sadly, you agree to variable rates when you sign up to a CC. They start you off low, and then when you have a nice balance on the card, they whack up the interest. Obviously, it's better for their profit margins and they know they have you, unless you have money in the bank to pay off the balance. There are lots of credit card calculators on the net, possibly even one on here somewhere - enter you balance and your interest rates, and then you can play around with amounts that you will pay each month and see how long roughly it will take you to clear the balance.
If your CC calculates the interest daily, you can also help yourself by paying whatever you can afford to as soon as you get your statement, rather than leaving it until the due by date, as this again shave valuable pounds off the interest and ultimately your total amout to pay.
Good luck.

nickmack

sweetbutternut wrote: »

In the meantime, HSBC keeps raising the APR on my credit card. In fact, it was shortly after I enquired about transferring the credit card debt to a loan with HSBC, that they raised my APR from 18.9% to 21.9%! Can they do that? Just raise the APR on a "whim"? What if they decide to suddenly raise the APR to 30%? I would just have to grin and bear it!

Any ideas on what I should I do?

Theoretically, they can vary the rate as per the T&C's. The government is supposed to cracking down (using the OFT - hmmm!) on companies who exploit customers by keep hiking the APR.

Under the proposals, companies should not raise rates in the first year and then only every six months maximum and provide 30 days notice.

TFD_2

nickmack wrote: »

Theoretically, they can vary the rate as per the T&C's. The government is supposed to cracking down (using the OFT - hmmm!) on companies who exploit customers by keep hiking the APR.

Under the proposals, companies should not raise rates in the first year and then only every six months maximum and provide 30 days notice.

A fat lot of good that will do, take Cahoot for example - they raised interest rates every 6 months on their flexible loans by a lot with notice and now I owe them £20K at 18.9%!

They shouldn't be allowed to raise an unreasonable amount if an account is managed correctly, and the OFT won't do a thing about that.

sweetbutternut

thriftymomma wrote: »

Sadly, you agree to variable rates when you sign up to a CC. They start you off low, and then when you have a nice balance on the card, they whack up the interest. Obviously, it's better for their profit margins and they know they have you, unless you have money in the bank to pay off the balance. There are lots of credit card calculators on the net, possibly even one on here somewhere - enter you balance and your interest rates, and then you can play around with amounts that you will pay each month and see how long roughly it will take you to clear the balance.
If your CC calculates the interest daily, you can also help yourself by paying whatever you can afford to as soon as you get your statement, rather than leaving it until the due by date, as this again shave valuable pounds off the interest and ultimately your total amout to pay.
Good luck.

Thanks for the info. If only I had realized that the rates are variable when I first signed up - but I was a credit card virgin when they gave me the credit card with my first job - knew nothing - so foolish.

"If your CC calculates the interest daily, you can also help yourself by paying whatever you can afford to as soon as you get your statement, rather than leaving it until the due by date, as this again shave valuable pounds off the interest and ultimately your total amout to pay."

That's very good advice. It's something I can work with. Thanks.

sweetbutternut

nickmack wrote: »

Theoretically, they can vary the rate as per the T&C's. The government is supposed to cracking down (using the OFT - hmmm!) on companies who exploit customers by keep hiking the APR.

Under the proposals, companies should not raise rates in the first year and then only every six months maximum and provide 30 days notice.

HSBC never gave me any notice. I just spotted the changed APR on my credit card statement.

sweetbutternut

TFD wrote: »

A fat lot of good that will do, take Cahoot for example - they raised interest rates every 6 months on their flexible loans by a lot with notice and now I owe them £20K at 18.9%!

They shouldn't be allowed to raise an unreasonable amount if an account is managed correctly, and the OFT won't do a thing about that.

Totally agree. I've had the debt for years and never missed a single payment, never been even a day late on any payment.

sferguson91

Apply for a virgin credit card.

It's 16 months interest free on a balance transfer for a fee of 2.98%

You can find this via moneysupermarket or just type a search into google.

Make sure you pay more than the min amount or you will be in trouble in 17 months time. (as only £25 a month)

sweetbutternut

sferguson91 wrote: »

Apply for a virgin credit card.

It's 16 months interest free on a balance transfer for a fee of 2.98%

You can find this via moneysupermarket or just type a search into google.

Make sure you pay more than the min amount or you will be in trouble in 17 months time. (as only £25 a month)

Unfortunately I have tried to apply with Virgin before, but was rejected - my credit score wasn't good enough (even though I never miss payments on anything ever) plus I'm self-employed.