Rate Jacking Article Discussion

[Deleted User]

The increased charge off rates. The good guys have to pay for the bad unfortunately.

audrey25

Renovatio wrote: »

Egg have recently tried rate Jacking me with a 5% increase in their standard rate at the end of a 0% deal; i was stoozing anyway and already intended to move it to a new barclay card platinum, but i still decided to send this reply to Egg:

"Hi,

Thank you for your email on 9th of March 2010, where you outlined your intentions to "rate jack" my account; you know full well that a 5% increase is excessive!

Needless to say i will be paying off my balance, so if your intention was to actually make more profit from me, well done in shooting yourself in the foot.

Egg used to be a good card company, a market leader even, so i will retain the card and consider using it in the future when you see sense.

I have no trouble getting large limit credit cards, so for me to continue using your services it really comes down to your old advertising slogan, "what's in it for me?"

The same pretty much happened to me. Egg didn't inform me of the first rate-jack - from I think 17% to 21% - and I went on letting them take their monthly direct debit without noticing. It was when they informed me of a further hike to 26% that I sat up and contacted them. I pointed out that they were doing pretty well getting a guaranteed rate of 21% from a customer who had never defaulted in the many years I'd had their card, and wasn't likely to, and that it was pretty bad business to encourage me to go elsewhere. No dice. It was 26% or nothing - so I've moved the balance to a 0% deal. No wonder they're in a mess.

I also have a question which is not specifically answered by Martin's article, excellent though it is. I have a couple of 0% interest deals which come to an end in December. These were not new cards: I paid off the balances and then did a BT from other cards. When the standard rate kicks in, does the freeze mean they will have to offer me the SR which was prevalent when I took the promotional deal or can they hike the rate to whatever they choose? I suspect the latter but live in hope. I'd appreciate a post from anyone who knows the answer. Thanks. Audrey.

Jigga

audrey25 wrote: »

I also have a question which is not specifically answered by Martin's article, excellent though it is. I have a couple of 0% interest deals which come to an end in December. These were not new cards: I paid off the balances and then did a BT from other cards. When the standard rate kicks in, does the freeze mean they will have to offer me the SR which was prevalent when I took the promotional deal or can they hike the rate to whatever they choose? I suspect the latter but live in hope. I'd appreciate a post from anyone who knows the answer. Thanks. Audrey.

Even though you are on a 0% deal, on the monthly statements it will still be displayed what the standard applicable rates are for your account (purchases, cash & BTs) so that is what you will be on at the end of the deal. However, as you have noted, rates are variable and can change.

audrey25

Jigga wrote: »

Even though you are on a 0% deal, on the monthly statements it will still be displayed what the standard applicable rates are for your account (purchases, cash & BTs) so that is what you will be on at the end of the deal. However, as you have noted, rates are variable and can change.

Thanks a lot, Jigga. That's a very good point and one I'd missed. Arguably, the requirement to notify me of any intended change to the SR and allow me to pay off at the existing SR will apply just as if I wasn't on a promotional rate at the moment, so that really answers my question. :T
Best wishes. Audrey

Linzii_2

I do not understand why credit cards have and are not stopped from hiking interest rates, it is baffling.

How does this enable customers to pay back or spend more to get the economy going.

Does the government want Britsih families to be in a constant state of anxiety & depression?

We were all lured in by low interest rates and most would pay the debts off if they were not continually hit with hyped up interest rates.

I really do not understand it at all, USA put caps on interest rates why can't the UK government- they can protect people & families from these dark tunnels that seem neverending.

Our next door neighbour who's late husband was a bank manager stated, when credit cards came, that it was a downward spiral for the country with credit cards eventually getting away with charging what they want with no restraint.

I feel really sorry for the Young children whose parents are under huge stress in these circumstances.

It simply is not right and I am amzed there is not more public outcry over this.

Why would the credit card companies care if the government do not- it is utterly disgusting.

Linzii_2

We all know this is not right and so does the government, we all know this will have longer term consequences on families who are beaten under by debt with no forseeable way out.

Why do they hike why can't they just allow the customer some leeway to repay the loan and not drown them in interest hikes.

I do not understand how the government has allowed this to go on, they have to control the situation better an this can be done by simply capping interest rates - WHY ARE THEY NOT DOING THIS???

cowbag789

quick question... does anyone know if it's possible to get a rate hike reversed when it has gone over the 30 days they give you to close the account? i've had this happen on 3 of my credit cards and due to some personal difficulties didnt do anything about it at the time.

GMan1960

I have an A and L credit card that had an interest rate around 16% and had used it for years until my divorce. I ended up with the card debt and missed a payment in early 2008 that put me over the limit. Since early 2009 I have not missed a payment, but got in touch with them in the last month as I couldnt understand why the balance was not coming down.

The limit is 6900 and the balance is just over 7000 and has been since early 2009, despite paying around GBP185 a month.

When I rang them I was told the intererst rate was 36% so I asked them when this occurred. They told me August 2008 so I asked them why it had gone up, and when I was notified, but as yet have not received a reply.

Indeed I looked at some old statements and in Sept, Oct and Nov 2009 my statements had the following on them:

"Promotional monthly rates you're currently using"
CNWCLD7ML 0.7168% for previous rate for life balances for the life of the balance

Can anyone tell me what rate this is. It certainly isnt 36%.

What can I do.

theinnertemple

Hi I have two MBNA cards one with a small balance and one with a big one (Virgin). In June MBNA wrote to me telling me they were increasing the rate from 16.9 to 28.9 % and that I needed to opt out, despite the fact I had never missed a payment on either of these cards. I assumed this only applied to the card with the small balance. Stupidly I didn't phone them straight away to opt out - mainly because I was out of the country for most of the month.

At the beginning of this month I got a message from Virgin saying my payment hadn't been made by my bank basically because the monthly payment had increased by a third and I wasn't expecting it. When I phoned them to complain they told me they could do nothing until I cleared the arrears. I have now complained to the Financial Ombudsman Service. I'll keep you posted about the outcome...

theinnertemple

Phone them. If you're not in arrears they might just put it down again - especially if you say you will have trouble paying the new amount