Barclaycard interest rate increase...what to do?

triticale

Hi all,

On my latest statement from Barclaycard, they have informed me that from December, they are increasing my rate from 17.9%pa to 22.9%pa! :eek:

This is disappointing, as I am planning to pay off my balance in full (nearly 3 grand) once I receive my PPI claim from my loan, which will be February at the earliest.

Then I was going to keep the card with zero balance except for absolute emergencies, which I would then pay off straight away (how credit cards SHOULD be used! :rolleyes:)

The reason I was going to keep it is because my credit rating is shot due to defaulting on a Tesco credit card (which I am now paying off through Newmans DCA) so I won't be able to apply for another credit card for a good few years, and would prefer to have one in reserve.

Barclaycard have said that if I want, I can cancel my account and they will apply the 17.9% until I clear the balance, which is fair enough. But then I would be without a credit card or the ability to get one.

I do have an overdraft which will still be available, but there are some things that you do need a credit card for. So I'm reluctant to get rid even once I've cleared it (however liberating that might feel!)

So, I'm stumped as to whether I should:

a) Cancel, save on interest until early next year, then be cardless, or
b) Keep the card, suck up the extra interest for a few months and then the rate shouldn't bother me as I won't be having a regular balance on there anyway, or
c) Any other option?

I am on the way to finally sorting out my debt problem after a distressing (self-inflicted) few years, I want to make sure I make the right decision with financial things every time from now on...I'm leaning towards option b) but it's quite galling that Barclaycard have chucked a spanner in the works! I'm actually a 'good' (lucrative) customer to them! :rotfl:

All views and suggestions welcomed

triticale

arenaman,

Thanks for the reply. Yes it is the platinum.

izools

To be honest if I still had a car at 17.9% and they said they would increase it to 22.9% I would be somewhat p!ss3d off, but certainly accept the change, knowing full well that I would not be able to get a better APR with my credit history as poor as it is.

How old is the default? What's the balance? You should be considered for mainstream deals once the default is satisfied and over three years old, as long as there is no other adverse on your credit file, but until then you will probably only be approved for the likes of Aqua, Vanquis, or Capital One Classic, all 35% APR + cards.

It might be worth applying elsewhere before deciding whether or not you will stick with the 22.9% just to see how badly that default is affecting you

triticale

izools wrote: »

To be honest if I still had a car at 17.9% and they said they would increase it to 22.9% I would be somewhat p!ss3d off, but certainly accept the change, knowing full well that I would not be able to get a better APR with my credit history as poor as it is.

How old is the default? What's the balance? You should be considered for mainstream deals once the default is satisfied and over three years old, as long as there is no other adverse on your credit file, but until then you will probably only be approved for the likes of Aqua, Vanquis, or Capital One Classic, all 35% APR + cards.

It might be worth applying elsewhere before deciding whether or not you will stick with the 22.9% just to see how badly that default is affecting you

Thanks for reply.

The defaulted debt has been with the DCA for just over a year now, still got around £2,300 remaining and am only paying £90 per month at the moment, so will be at least a couple of years even if I up the payments slightly.

I did try a rather cheeky CC application with my bank (First Direct) a couple of weeks ago, the answer was a swift and resounding 'No.'. :rotfl:

Guess I'll probably just accept the rise then, and be smug in the knowledge that they'll soon lose their regular income from me anyway!

izools

And good luck with completing on the PPI claim