Why are companies like Capital one charging APR of 30%

ILW

morse1 wrote: »

I can not see how credit card companies can put interest rates up to 30% I have two Capital One and Egg with all the others around 22 and 24%. What I dont understand is how the Government has not placed a Cap on the APR I can understand a free market but a mortgage is just the same and they follow Bank rates> My problem is they have put it so far up I can not manage it now and have called CCCS this now puts me in bad credit and they will have to freeze the interest !!> It is not my fault I could manage when interest rates were 16% but they have nearly doubled!! I just don't understand how they have been allowed to get away with it!!! All that is happening is more and more people are going bankrupt of IVA or DMP.....:mad:

Credit cards were never meant to be used as a means of long term borrowing. If you use them as such you are just asking for trouble. Best bet is to just try to live within your means then it doesn't matter what they put their rates up to.

morse1

_Andy_ wrote: »

I love the irony of you stating that having said earlier "I really cant give a stuff right now I will just go bankrupt". Genius.:T

Irony What Irony!! Do you know what your talking about????:rotfl:

_Andy_

morse1 wrote: »

Irony What Irony!! Do you know what your talking about????:rotfl:

Yes - you are talking about 'idiots' whilst clearly you are one. Bless.

Any

morse1 wrote: »

Irony What Irony!! Do you know what your talking about????:rotfl:

OP I suggest you calm down, this is going to just end up in massive slagging off (of you and rightfully) and there is no point of forums like these if you cannot take the hint.

Credit cards and mortgages are 2 massively different things - mortgages are SECURED loans so the risk is nowhere near the same level.

Credit cards are unsecured and so the banks has to deal with the risk somehow. Rule 1 of the economy - the higher the risk, the higher the return (ie percentage) - ie more expensive for borrower, more money to be made for lender (or none, that is the risk).

Come here more often so you are aware of such a laws as that you can tell them to stick their % rise somewhere etc.

It pays to be clued up.

7891368

If you clear some of your credit you won't be such an easy target.
If they realise that you cannot pay the balance of the card of i.e. consistently making minimum payments, surely you're easy money for them.

Take advantage of the vulnerable and all!

morse1

_Andy_ wrote: »

Yes - you are talking about 'idiots' whilst clearly you are one. Bless.

Ahh were you an only child I wonder why??:beer:

Wutang_2

morse1 wrote: »

Ahh were you an only child I wonder why??:beer:

You really are not aiding your (misguided) cause are you?

Typhoon2000

Getting a little back on topic, my experience with MBNA intrest rate increases show little rhyme or reason. I had 3 card, They bumped all of them from around 15.9 to 34.9%. I rejected one I had abalance on and closed it once paid off.
The other cards had no balance with credit limits of £12500 and £15000. They have now thrown 11month 0% deals my way on both cards (gladly accepted, will be paying off before they the interest period ends). I rang to ask if the interest rated could be reduced so I could carry a small balance (I am not going to be carrying any balance at 34.9%) but they said no, risk pricing or something. Clearly they dont think I am bad risk, my balances were £0 of those two card before they bumped up the rates, they are giving me £27500 credit and throwing in a 0% sweetner. Surely, if I I was some form of a risk and could only qualify for their subprime 34.9% rather than their typical 15.9% rates they shouldnt be giving me 0% offeres and such high limits?

izools

morse1 wrote: »

I would advise anyone to go bankrupt or on to a DMP the card companies want their cake and eat it they cant have both. As I said in 10 years i dont think they will be around thank god!!!!:rotfl:

OK so you say you've got good credit? Just because you've never missed a payment doesn't mean you have good credit.

Credit card companies will consider you to be a high risk if any of the following apply:

• You owe more than about 33% ~ 50% of your annual income
• You are close to your credit limits across accounts
• You have a track record of only paying a tiny fraction of the outstanding amount
• You have a habbit of spending almost as much as you repay leaving the account continually close to it's limit
• It's been more than 6 ~ 12 months since you had a £NIL balance on your credit account(s)

From what you've said, you're suffering from debt stress, are on the edge of what you can afford to repay, and as such are a very high risk to the credit card company.

The attitude you have toward your responsibilities backs up the credit card companies belief, that you are a much higher risk than when you fist opened the accounts.

They are therefore increasing your APR as damage control given they see it quite likely you are going to default in the future.

It's a variable APR account, the APR is the result of risk analisys.

Not only did you agree to enter into a variable rate agreement, but you chose not to opt out of the increases.

You made the choices, so now you have a responsibility to live with them.

If you are suffering debt stress, don't try and palm off responsibility to the creditors - if you are open and honest with them about the situation and seek professional advice you'll be able to come to an agreement that is mutually acceptable to you and the creditor. But it's not their fault you're in this position -

you chose to accept higher APRs, you chose to take out variable APR accounts, and you chose to spend more than you could comfortably afford to repay.

morse1

izools wrote: »

OK so you say you've got good credit? Just because you've never missed a payment doesn't mean you have good credit.

Credit card companies will consider you to be a high risk if any of the following apply:

• You owe more than about 33% ~ 50% of your annual income
• You are close to your credit limits across accounts
• You have a track record of only paying a tiny fraction of the outstanding amount
• You have a habbit of spending almost as much as you repay leaving the account continually close to it's limit
• It's been more than 6 ~ 12 months since you had a £NIL balance on your credit account(s)

From what you've said, you're suffering from debt stress, are on the edge of what you can afford to repay, and as such are a very high risk to the credit card company.

The attitude you have toward your responsibilities backs up the credit card companies belief, that you are a much higher risk than when you fist opened the accounts.

They are therefore increasing your APR as damage control given they see it quite likely you are going to default in the future.

It's a variable APR account, the APR is the result of risk analisys.

Not only did you agree to enter into a variable rate agreement, but you chose not to opt out of the increases.

You made the choices, so now you have a responsibility to live with them.

If you are suffering debt stress, don't try and palm off responsibility to the creditors - if you are open and honest with them about the situation and seek professional advice you'll be able to come to an agreement that is mutually acceptable to you and the creditor. But it's not their fault you're in this position -

you chose to accept higher APRs, you chose to take out variable APR accounts, and you chose to spend more than you could comfortably afford to repay.

Absolute Tosh the credit Companies didn't mind lending to be quite frank giving away money to anyone when credit was easy, lets not forget who got everyone into this bloody credit mess the banks and who bailed them out the public purse, so don't get on your mighty horse and talk rubbish you can go on all about how you should of read terms and conditions etc etc but most people don't!!!. I said before I wasn't a liability until they increased my interest rates from 12% -16% to now 30% so there is no win situation for anyone I am not the only one in this situation I know loads of people who are on other sites who have gone bankrupt because of the greed of the Banks nothing else!!!:mad: