Rate Jacking Sucesses/failures

f1shing

Letter today from Capital One informing me of increase of standard interest rate to 13.94% from 6.730% which I believe is more than double.

loveandlight

Lloyds Bank Advance Credit card rate jacked me from 11.9% to 20.9% even though I have never missed a payment ever and have a very high credit rating within Lloyds Bank internal banking system and a 30 year default free payment history on my credit files generally. They have done this because I have other credit card debts as well although they are all always paid on time as I pay by monthly direct debit. This is very bad practice and should be made illegal.

Lexis200

OH's cap1 card has just gone up from just over 1% to just over 2% monthly (can't remember what the APR comparison is).

This came immediately after he missed a payment (the first in about 5 years), which was actually due to his bank cancelling his direct debits. He'd made a few small payments for ebay goods, they'd been flagged on his account and rather than phoning him they simply cancelled the d/d's, then sent a letter which arrived some 6/7 days later. This caused him to miss a payment and his rate was increased.

He phoned cap1 and told them this, and that the bank would be writing to explain it (true), but they refused saying it was due to the current financial climate and interest rates (what, you mean them being the lowest in many years??). The lady he spoke to also said, and repeated several times, that it affected every single cap1 customer. After he'd got her to repeat this statement a few times he asked why then had I not got a letter. She then changed her story to it being only some customers.

Got the manager on the phone who said she should not have said that (really?:rolleyes:), and he could close the account or sod off elsewhere (I'm paraphrasing there!).

I'm just wondering if I can do anything about it, using the fact she was flat out lying to OH, and did so several times until her bluff was called. We have the whole conversation recorded, so can prove everything.

What does anyone think?

petera74

The problem the average consumer for credit cards is having is simple!
The minimum payment mainly is made up of interest due to the Credit card.So no debt on the card ever gets paid!
For me. I have 3500 pounds of debt on a Virgin MBNA card. In Jan 2008 they changed my interest rate from 15.9% to 29.9%.
So I work out I can only pay about 100 pounds each month. Of which at 29.9% APR. 86 pounds is interest and 14 pounds is off the debt. So in a year of paying 100 a month, 1200 for the year. 1032 pounds is interest and 168 pounds is off the debt.
So in a year at 29.9% APR I would get the debt down to 3332 pounds.
If they left me at 15.9% which I signed up for and spent at that rate.
At paying 100 pounds a month for a year 1200 for the year. I would have paid 528 pounds in interest and 672 pounds of the debt.
So in a year I would at 15.9% APR I would get the debt down to 2828 pounds.
To me at a rate of 15.9% APR I have a chance at clearing the debt.
At 29.9% it is a lot harder to do.
This is were the credit card companys are clever, they know that if they leave the rate at 15.9% then the debt will be cleared at some point. At 29.9% they know that an average consumer will not be able to keep up at 29.9%. Therefore they are keeping money flowing in.
They need to be stopped ASAP with interest rate hikes.
If you go to MBNA credit cards and request all consumers with a debt higher that 3000 pounds, ask them what rate the consumers are on. You will be surpised at how many people are at 20% and over!
I would say 95% of consumers are in the same boat as me.

tryfive

nothingwitty wrote: »

Vanquis - 10% increase
Managed to get rate reduced but only by closing my account.

ISTM Vanquis are pretty disgusting - from their WWW site: 39.9% APR interest?!!

The worst part being they target people who have seriously bad credit - which means that the only people likely to take them up on this offer are those who can least afford it :mad:

(To contrast: 39.9% represents an 800% increase from the Bank of England's base rate.)

flopsy79

I have just successfully managed to stop Egg from increasing the APR by 5%

I have been getting advice from the CAB and as Egg have been formally notified of this they have had to keep it at the current rate (still 21% but better than 26%)

I have writen to my other cards-MBNA and Tesco asking they reduce the APR back to the level it was when the CAB notified them, waiting for a reply.

It's so easy not to notice that they are even raising the APR until it's too late. I would advise anyone to seek help from the CAB or any other recognised agency as it can be a help in all sorts of ways just to have that on record and this is just one of them.

It seems so unfair when you are struggling to pay your debts off that they hike the APR and make it even harder to pay them off. I would advise everyone to check their current APR% and put it in to a debt calculator, it can really open your eyes and help you prioritise which debt needs paying off first.

It's one small success but it has given me a boost as so often you feel completely out of control when you are in debt! Go for it and take control!

ElkyElky

tryfive wrote: »

ISTM Vanquis are pretty disgusting - from their WWW site: 39.9% APR interest?!!

The worst part being they target people who have seriously bad credit - which means that the only people likely to take them up on this offer are those who can least afford it :mad:

(To contrast: 39.9% represents an 800% increase from the Bank of England's base rate.)

Vanquis are a good company though. They help people with no credit history or a damaged history back onto the credit ladder. Very few lenders will accept someone with multiple late payments or defaults.

Their interest rates can go as high as 59%, as some has discovered.

sillymoo_2

I've just had an interesting conversation with staff from Capital One....when I asked why they had upped my interest rate despite my running my account with NO problems they said it was because of the economic downturn....so I asked why they are STILL offering cards at my previous rate and they said that was for new customers!!!.....does that make sense...I don't think so
.....I therefore told them that I wished to opt out and they asked if I was going to pay off the money I currently owe.....not at all said I and quoted them the wording off MSE to which they agreed I could pay that way.
Too right I can......this has given me the impetus to really make some serious money saving efforts.....I feel quite excited!:T

LittleMissFairyWings

I've had this problem recently with a couple of my cards from BOS and Halifax - they jacked up the rates from 15.9% to 21.9%!!!

The solution?

Phone up and ask to speak to someon in Customer Retention, explain that you are currently getting lower rates on other cards (fib), and that their rate hike means you would be better off transferring the balance elsewhere. Both banks in this instance decided they'd prefer being able to charge me 15.9% instead of nothing at all.

Incidentally, I also used this "I can get a better deal elsewhere" trick with Orange recently and got myself a free Blackberry out of it

izools

ElkyElky wrote: »

Vanquis are a good company though. They help people with no credit history or a damaged history back onto the credit ladder. Very few lenders will accept someone with multiple late payments or defaults.

Their interest rates can go as high as 59%, as some has discovered.

I wouldn't say Vanquis are a good company although they do serve a very helpful purpose. They have the most lax acceptance criteria of all the UK credit card providers - this is the reason for the high APR, they lend to the highest risk borrowers in the land and they have to cover unpaid debt with high APRs.

If you are deperate to rebuild a credit record, Vanquis are a good starting ground - but only if you are confident enough to be able to clear the balance in full each month, that you set up a DD for the full amount.

Their rates can go higher than 59.9% now - their credit agreement no longer states a minimum and maximum for the variable APR. My OH was rate jacked to 69.9% by them earlier in the year but after a complaint to the FOS it's back down with a nice interest rebate on the last bill, too

Never spread payments with a Vanquis card!