Massive inexplicable increase in APR

DeusXM

I’ve just had a letter through from LloydsTSB telling me they’re increasing my interest rate - in real terms it means my rate is going up by more than 25% (in real terms, not as in from an APR of say 6% to 30%!)

I’m a bit shocked because I have been a really good customer – I’ve had the card for over 5 years, I’ve never missed a payment and there has always been something on the card, so they have always made good money out of me as well.

I’ve called LloydsTSB and they say that everyone is having their rate increased, but what is seriously annoying me is that my card will have an interest rate higher than that of the student card – yes, I am employed full time with a proven good credit rating yet I seem to be regarded as a more serious risk that someone without an income or a credit history.

I’m a bit stuck as to what to do – I’ve called Lloyds and while the advisor said “Gosh, that is a big increase”, apparently they’ve no interest (ho ho) in changing it.

I’ve told them I’m disgusted as to how they’ve treated a loyal customer (I’ve banked with Lloyds for over 15 years!) and that I’ll be moving and closing all my accounts with them as a result of how they’re treating me but they don’t seem to care. I am using about 50% of the balance and stopped spending on the card about 4 months ago, making large payments each month to clear the balance. I suspect they’ve spotted this and are just trying to rinse me for as much as they can until the balance is cleared.

Shall I just cut my losses and cancel my account once cleared, or should I keep arguing for a rate reduction? I was told I could get the rate frozen and the account would then close once I’d paid it off but I’m concerned this will affect my credit rating – will it? They also said they could offer me a loan – if it’s a better deal, should I take that out and use that to pay off the card?

immoral_angeluk

What have they changed it from and to?

If you're that unhappy you can 'opt out' so long as you stop spending on the card and it's closed once the balance is clear. It won't affect your credit limit in any way.

CLAPTON

how much is the debt
what was the old rate
what was the new rate
what rate do they offer for a loan

nzmegs

I have received a similar increase letter from Halifax today. They really do have you over a barrel. There are few options available to move your account to and so you are often stuck. We don't really use our account and much of it is on a special rate (life of balance) but even so it does really annoy me as we have never made a late payment or even spent excessively on it.

gkb_2

Just had the same from Egg, rate up from a ridiculous 21.9% to a ludicrous 26.9%, they may have a point if they look at all my credit outstanding alone but I have never had a missed or late payment and am managing the debt especially as they have just given me a 0% 6 months.

The sentiment of customers not being given too much credit is genuine but I fail to see how charging those who are not paying off the balance outrageous rates is not pure profiteering which I would feel alot more comfortable if they did not pretend they were doing it for other reasons.

chattychappy

I really don't get all this emotion. Do people get so "shocked" and "disgusted" when their favourite supermarket puts prices up?

They've decided to make a commercial decision and raise the price of credit. They think they will make more money out of you this way.

Take your business elsewhere - if you can get a better deal elsewhere.

As noted, you do get the chance to fix the interest rate and pay off the card within the normal terms, provided you stop new usage. Really, that's quite a compromise IMHO.

izools

DeusXM wrote: »

I was told I could get the rate frozen and the account would then close once I’d paid it off but I’m concerned this will affect my credit rating – will it?

This won't affect your credit rating one jot - it will still appear as an open and active credit card on your credit files.

The repayment terms won't change either.

All that happens is you are not allowed to make new debits on the account. That's it. Everything, including APR, stays the same as it is now.

If anythying it's a really great way to help you clear your CCard debt IMHO

fozmcfc

izools wrote: »

This won't affect your credit rating one jot - it will still appear as an open and active credit card on your credit files.

The repayment terms won't change either.

All that happens is you are not allowed to make new debits on the account. That's it. Everything, including APR, stays the same as it is now.

If anythying it's a really great way to help you clear your CCard debt IMHO

I fully understand the above, but I do have a question.

What happens if someone has one of those reoccuring payments, the ones where people say "I closed my card down 2 years ago, but they let a payment go through and now I'm being charged for missed payments"

izools

fozmcfc wrote: »

I fully understand the above, but I do have a question.

What happens if someone has one of those reoccuring payments, the ones where people say "I closed my card down 2 years ago, but they let a payment go through and now I'm being charged for missed payments"

Hmm... never come across one of those TBH. I would imagine it would constitute a request to re-open the account and accept the new, higher APR.

As always, the onus is on the cardholder to contact any company they had a recurring authorisation with and rescind permission to use that card.

If they company charge the card anyawy, the cardholder has the right to sue / demand all of the extra interest they'll pay as a result, from the offending company.

Degenerate

izools wrote: »

If they company charge the card anyawy, the cardholder has the right to sue / demand all of the extra interest they'll pay as a result, from the offending company.

If they charge the card anyway after authority has been withdrawn, the customer should pursue it via their CC provider like any other fraudulent transaction.

izools

Degenerate wrote: »

If they charge the card anyway after authority has been withdrawn, the customer should pursue it via their CC provider like any other fraudulent transaction.

There is of course that, too. Probably a lot easier and more effective doing it this way, too :beer: