MSE News: Government steps up credit card crackdown

petera74

Sorry I meant Jan 2009!

never-in-doubt

petera74 wrote: »

Sorry I meant Jan 2009!

Well then yes you can, unless you've been using the card and/or they never notified you that you could pay at the old rate. The date this came into effect was 01.01.2009 so you'll be fine.

Read martins guide as directed by him in his last post: http://www.moneysavingexpert.com/reclaim/credit-card-interest-rate-increases

petera74

Thanks I complained about the interest as below:
They never mentioned about a rate freeze in any correspondence to me, shocking! I dont use the card and havent since the increase to 29.9%.

Jan 2009
I am sorry it has come to this, but this time I complain in the highest capacity. I am disgusted in the way I have been treated. I will explain below:

I have paid on time and over the minimum payment each month but the APR has doubled on my credit card, from 15.9% to 29.9%. Yes 29.9%!!!!!!!
I have had no written warning about the APR increase. It has just appeared on my statement. I noticed it from the new interest amount in pounds shown on my account statement, no sign of the new interest rate as a percentage. I had to figure the new rate out for myself. Why is the % figure always hidden?

I have been in touch with the Office of fair trading about this and they say “This breaks the Un-fair terms in a contract”
I also believe that you have broken the terms of the agreement between me and you as a financial lender. Firstly because you haven’t informed me about the rate change. Secondly because the increase is unfair.

Please explain the fairness of the increase that has doubled on my account (from 15.9% to 29.9%), for no reason whatsoever and how this is deemed fair?

Please explain why 30 days before the increase I have not received notification in written format about the change from 15.9 to 29.9%?

Why does the credit card statement only show the amount in pounds and not the percentage rate?

Can you explain to me the model on which you determine my new variable rate? Ie Mortgage variable rates follow interest rates?

Why is the % amount always hidden or not shown at all on the statement?

Why have you exploited the term variable in your terms and conditions?

Please supply a detailed explanation for the increase in my APR?

Thanks

Peter

never-in-doubt

can you keep all this in one font or quote bits you sent - slightly confused mate?

ProfessorX

[/QUOTE]
"The Government is attempting to cut up the credit card rule book, launching raft of proposals aimed at reducing the £53.9 billion of debt we owe on plastic as a nation ..."

Read the full story:
Government steps up credit card crackdown

[/QUOTE]

Why does this MSE Article quote the debt figure as 'only' £53.9 billion when the Government's Consultation Document speaks of £230 Billion including store cards and others. That's a big difference!!

However, whatever the true amounts are, the only real principle which is relevant, is that Human Rights have been ignored by all UK Governments since 1948 otherwise there would be no such debts.

I suggest you all download a copy of the Universal Declaration of Human Rights of 1948 from the Office of the High Commissioner of Human Rights from this page http://www.ohchr.org/EN/UDHR/Pages/SearchByLang.aspx
and consider Articles 1; 2; 4; 12; 17; 22; 23; 25; 29 & 30 just for a start.

Consider how any UK legislation has protected any of these rights, or controlled the way Banks have operated, especially since Thatcher's monetarism, from 1979 on, based on individual greed. Love of money is the root of all evil and yet we are all slaves to the money. The Banks have increased the money supply, but only by increasing debt rather than by the Government making wages higher to increase spending [she suppressed the unions to keep wages down and the minimum wage isn't enough to comply with Articles 22 & 23(3) in particular] or by controlling interest rates on debt or 'prices in shops' to increase spending power as another way to improve value for money and quality of life. That was another 'aim' of the UN Declaration, to free the world's peoples from 'want', which we are still wanting in the UK. What chance do 'third world countries' have of getting this if we have none in a 'first world' country?

You must all demand answers from your MPs [who are more than justly remunerated, as have all CEO's of Banks etc. been], as you have this right under Article 6 of another UN Resolution 53/144 of 9th Dec 1998, so why not do it now? Even the European Court has ruled that your money is your property, so under Article 17(2) of the UDHR no one has the right to 'arbitrarily take it from you, which is what the Banks and others have done for years, if not decades, with Government approval.

Let's make the Democratic Political Revolution a permanent solution and end 'Rip off Britain' once and for all.

It_Gets_My_Goat

Watch out for this one also - Instead of setting up the minimum payment on a card I transferred a balance to, I tried to set up a set higher amount, that I knew would bring my balance down sooner by paying over the odds.

Would my credit card company let me do this? No! You have to set it up as either the minimum payment or pay off the full amount! Not exactly there to help are they? Another money making scheme. Even if you want to pay more, they don't let you unless you make a payment in addition to your direct debit payment. Who wants to be bothered with the faffing about of paying twice? You just end up letting the minimum payment go through, and they make more money cos it takes longer for you to pay the balance off!

Aytoun27

If they increase the minimum payments on credit cards to around 5% our debt repayments will go from £650.00 a month to £1650.00, from can pay and will be debt free in five years, to no-way-we-can-afford-it :eek:

I've already written to my MP about it - something that I've never done before as I'm so worried about it.

I just hope that they only apply a percentage increase to new debts. If they really can't leave existing debts alone, then I hope that they give people the option to close the account and pay at the current percentage, as with the APR hikes.

Cell

I originally penned this a week ago but as I posted it the forums went down for maintenance and I've only just remembered!

Hope it doesn't seem like old news or out of context now:o

The suggestions in the consultations are exactly that - consultations. The responses on the BSI website should leave no sane government (;) ) in any doubt as to how increasing minimum payments would affect a significant number of people.

I was worried when I first heard about it but having read the hundreds of responses I cannot see how they could legislate (or coerce) this through. I had thought I was in a minority - clearly I'm not.

What has angered me, bringing to the surface resentment that has been bubbling away ever since I started really reading MSE Forums, is the absolute liberties that CC providers are taking in relation to interest rates.

Yes the terms and conditions say that interest is variable, but the vast majority of people would not and could not have anticipated that 'variable' meant doubling rates, 38-40% APRs on standard balances for people who have not defaulted in any way etc.

The base rate argument is a bit of a red herring really because commercial money isn't really changing hands at 0.5% or anything like it. And the risks of lending HAVE gone up. But what is there to stop card companies charging 50,60,70, 80% APR? According to the contract that you sign there is NOTHING to stop that happening. At least now you can reject the rise but it also means you have to give up the card without the realistic option of applying successfully for another. It therefore leaves people slowly but surely disconnected with the credit market and takes away their safety blanket (which, like it or not, is what it actually is for many people).

Those who have money and little or no debt can look on smugly, or sympathetically, but all this means less to them. There is a vast rump of the population who have become utterly hooked on credit and the economy has been buoyed by it without government caring how. It was no miracle. It was short termism at its worst and now people who took credit on find more and more of their payments going to the 'dealer/pusher' with less and less benefit to the addict (if you pardon the metaphor).

This country is addicted to credit. Utterly. Both personally and governmentally. What we need is a long, considered, but powerful programme to ensure that it never happens again.

Gordon_the_Moron

It_Gets_My_Goat wrote: »

Watch out for this one also - Instead of setting up the minimum payment on a card I transferred a balance to, I tried to set up a set higher amount, that I knew would bring my balance down sooner by paying over the odds.

Would my credit card company let me do this? No! You have to set it up as either the minimum payment or pay off the full amount! Not exactly there to help are they? Another money making scheme. Even if you want to pay more, they don't let you unless you make a payment in addition to your direct debit payment. Who wants to be bothered with the faffing about of paying twice? You just end up letting the minimum payment go through, and they make more money cos it takes longer for you to pay the balance off!

There is a way to get round this, get the account number and sort code for your bank and use your card number as a reference for making the payment, you can then set up a standing order, if you do this you don't need a direct debit and you can increase or decrease it online as you please. The only time you would be better off with a direct debit is if you want to pay either the bare minimum (because you've got more expensive debts or a 0% offer) or if you want to pay in full each month. A standing order has to be a fixed sum not a proportion of the debt. Also if you do this if you are still using the card for balance transfers or spending be careful the standing order amount does not fall below the minimum payment.

Cell

And the story moves on, this time through the back door.

Price Waterhouse Cooper have come up with an astonishingly insightful report which, it could be argued, gives the green light to card issuers to extract yet more out of us.

http://news.bbc.co.uk/1/hi/business/8349153.stm

There is a lovely paragraph in there which shows incredible naievety or a simple lack of understanding of what is going on.

PwC predicted that these losses would rise dramatically to levels never seen before in the UK as a result of rising unemployment, short-time working, and pay freezes and pay cuts.

No mention at all of the fact that APRs have already gone through the roof, thus locking people into a debt cycle they can no longer escape from if the remotest thing goes wrong in their financial lives.

Is this report sponsored by the card companies? It seems like an almost pre-planned shot across the bows of the government just as the initiative that this thread is all about is in its earliest stages.