rate jacked...ADVICE PLEASE.

SeanyP321

Ive just been reading the very interesting article
Reject credit card rate hikes

and it states that under the "The December 2008, UK Payments Administration statement of principles on repricing...

You can close the account and repay at current rates

"These will always include the option to close the account and repay the remaining balance at the existing rate of interest, within a reasonable period, having regard to the existing level of minimum payments and the customer’s financial situation. Where we offer alternative lending products, we may also provide the option to transfer the balance to such a product at the existing (or lower) interest rate."

AM I READING THIS RIGHT???
I have about 5 grand with MBNA that is going to hit 35% apr in december and noweher to transfer it to, due to banks tightening their belts. I'm really going to struggle to pay this. I don't want to go down debt solution avenues for obvious credit score reasons. Does this mean I can call MBNA and request to have my accounts closed and pay off my debt at the current rate. That would be F&*$^^# brill!! :T Is it possible????????? Any advice would be pprciated very much

SeanyP321

bump...anyone?

HillyBillie

I'd be really interested to see if this is true. Cap One did the same to me and wouldn't listen to me when I said I was already having trouble making the payments at the existing rate. I wonder how you/they decide what a reasonable length of time is? And also how it might appear on your credit report?

HB

SeanyP321

it seems it wouldnt appear on your credit report, you just wouldnt be able to borrow again (FINE BY ME). But I am going from a 0% APR to my standard rate and so I'm not technically being exposed to a rate increase. Still wondering if I can do it? Anyone?

I am in a position where I can not afford to destroy my credit rating with a DMP, nor can I afford a 35% APR, nor can I get any further lending to cover my balance. THERE MUST BE A SOLUTION!

indesisiv

have you read all of Martins article here
http://www.moneysavingexpert.com/reclaim/credit-card-interest-rate-increases

GeorgeUK

Not come across this before. I'm not sure if this will be as a repayment similar to a DMP where it will be marked on your credit file or not though - there's not really enough detail.

The state a "reasonable period", but what you think of as reasonable and what they think of it may not be the same thing. Also the "alternative lending products" may be a secured loan or similar type of debt - not sure i'd be tempted.

What is your current interest rate that you are keen to keep? They wouldn't keep the rate at a promotional one. Do you have any old credit cards that you may be able to get a BT deal on as an existing customer? I just got 6 months @ 3.9% with RBS.

ExNicotineQueen

HillyBillie wrote: »

I'd be really interested to see if this is true. Cap One did the same to me and wouldn't listen to me when I said I was already having trouble making the payments at the existing rate. I wonder how you/they decide what a reasonable length of time is? And also how it might appear on your credit report?

HB

Cap 1 rate jacked me a few months back, they wanted to increase it by 10%. In the letter you are given a date to respond by (I think it was 30 days) and a quick phonecall later my rate is going to remain the same and I can continue making min payments or overpay at the same rate I was paying before. I cannot use my card and once the debt is repaid, my account will be officially closed. I recently obtained a copy of my credit report and there was no adverse data applied from Cap 1 regarding this or any 'arrangement to pay' written on my files, all it showed was a nice green '0' where I had made my monthly payment.

SeanyP321

yes, every word. That is what I quoted from, but it seems to imply that it is only an option for those who have been TOLD by the bank in writing that their rate is increasing. Mine is not increasing anymore then I expected it to. It is going to what they would call "normal". So I'm unsure if I can still use this as an option??? Thanks!

ExNicotineQueen

SeanyP321 wrote: »

it seems it wouldnt appear on your credit report, you just wouldnt be able to borrow again (FINE BY ME). But I am going from a 0% APR to my standard rate and so I'm not technically being exposed to a rate increase. Still wondering if I can do it? Anyone?

From Martin's article;

Translation: Lenders agreed not to increase interest rates within 12 months of a credit or store card being taken out. Sadly this only applies to standard APRs not losing 0% or other promotional rates.

So that would be a no then.

SeanyP321

ahh, obviously didn't see that bit. Gonna go through all my old letters, ive had the card for years (they have always renewed offers on 0%aprs for me) and im sure they have increased it in that time. Perhaps I revert back to an older apr that is not as high. I know the article says this should be done within 30 days, but worth a try huh?

ExNicotineQueen

If you've had the card for years, what was your APR before the 0% promotional rate?

Whatever that rate was, that is the rate it would become if you decided to close the account/stop the increase to 35%.

I would imagine you have 30 days from the date of the letter you received from the cc company telling you about the increase, to tell them no thanks and close your account.