Rate Jacking Article Discussion

mcscott

Hi all - great thread, though depressing reading I have had my MBNA card for many years (15?) and have rarely, if ever, missed a payment. Over the last few years, I have been making only minimum payments (long story of an unsold property in France). A couple of years ago they slashed my limit from £15K to £9K. I've hardly used this card since 2008. Earlier this year they advised me of a rate increase - it looked only small in terms of APR - but my minimum payment has gone up 40% :mad: As I am now disabled and on benefits, I rang them to say I couldn't manage to pay this higher amount. I was given the number of their 'Account Review' team. QUESTION _ Will this have an adverse effect on my credit rating ??? (it's taken a bit of a hammering recently due to knock-on problems in France).

udydudy

Linzii wrote: »

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

If credit card rate increases are baffling....Wait until the base rate starts rising and banks start raising their SVRs more than the base rate rise!!!....

They would love to point at libor but simply put they are all trying to add to their bottom line so as to enable huge payouts to the top honchos!!!...

bleak_2

I Have a Citi card, recently they sent me a letter stating my interest rate was being increased ti 39.9%, how on earth is this legal..........to me it's pure greed.........I have rejected the hike but have heard nothing back no doubt they will have never received the letter, I refuse to call them as they are so rude.

vicke_p

bleak wrote: »

I Have a Citi card, recently they sent me a letter stating my interest rate was being increased ti 39.9%, how on earth is this legal..........to me it's pure greed.........I have rejected the hike but have heard nothing back no doubt they will have never received the letter, I refuse to call them as they are so rude.

I've just had the same letter with standard rate of 37.1%. When I first took the Citi card ten years ago my rate was 14%. I managed to have this reduced to 9.9% where it stayed for quite some time until all of a sudden it went to 14.9%, 17.9% then 21.9%. I never spend on the card instead I have a 5.9% lifetime balance transfer offer. Citi once screwed the account up so badly when their 'systems' were changed over about five or six years ago that I spent a fortune in calls trying to resolve their mess, they even had the cheek to apply missed payment fees to the account despite all of the direct debits being taken.
Anyway, Citi are selling on to OPUS (a subsidiary of RBS) and their terms and conditions aren't clear regarding my 5.9% rate. I have not and do not miss payments but can't see how they can hike a lifetime 5.9% transfer rate to 37.1% just because they have sold the debt.
I would love to know how I stand legally and if i can close the account so that it becomes repayment only. Their T+Cs state that I can close the account within 14 days but will need to repay the outstanding amount in full, I do not have £4000 to hand !!
Any help would be appreciated.:eek:

anyusernameleft

I ran up a card with Virgin to survive after my business was destroyed in the recession. They jacked up my rate to 29.9% this year and although I've been making the minimum payment and not used the card since I finally found a job in April the balance goes up each month.
This was originally one of those 0% for a year cards everyone gets so excited about.

I hope something really nasty happens to Richard Branson.

izools

anyusernameleft wrote: »

I hope something really nasty happens to Richard Branson.

The decision wasn't made by Virgin, rather by MBNA. Virgin cards are just MBNA cards with MBNA scribbled out and Virgin written on.

You can opt out of the hike and clear the balance at your original rate as per your original terms, or move the balance elsewhere

madyliz

My rate has been put up by Egg as well, to 26% I am in discussion with them by online emails!! they keep saying the same thing just listing a few reasons why rates have gone up but not specificaly mentioned my credit rating which is good.
they are digging in their heels at the mo but I have now recieved an email from a supervisor who again repeated the same thing in a different order and used a few more fancy words!! I have now asked to be reffered to the complaints dept,, so will keep you updated.
they also say I should have requested to close my card if I wanted to keep the same rates,, but I don't want to close the card.
also read on another site that they are not allowed to increase the rate on current balances after Feb 2010 as long as they are not added to is that correct??:(

[Deleted User]

madyliz wrote: »

they also say I should have requested to close my card if I wanted to keep the same rates, but I don't want to close the card.

also read on another site that they are not allowed to increase the rate on current balances after Feb 2010 as long as they are not added to is that correct??:(

Which is all the same thing. If you close your card (so you can't add to the balance), then the rate can be frozen.

If you need to keep the card even in the face of higher rates, it demonstrates that you are a higher risk - ie you have no other borrowing options. Which is why they increased your rate.

suebron

Been a perfect customer for at least 5 years. Interest was 6.9% plus £2 month "card fee" brought in about 3 years ago. Today received a letter saying APR was rising to 15.9% in April this year. I have not used account much lately as I'm paying it off gradually. I think the APR rise is because I have recently reached 60 years of age and retired. Age prejudice perhaps?

missnomoney01

HI, i have a santander credit card and they planned to hike my rate up from 26% (which was hiked up last year from 16%) to 34.9%!! I rang them and was told it was due to banking rates, and poss my credit file??

i have now opted out of this ridiculous scheme and i am told i may have a indicator put on my credit file because of this........what is going on with this banking system.

if i don't opt out i am trapped in a high interest rate and if i do opt out i get a bad mark on my credit file????????