Credit Card question

houndofculaine

I ran up a debt of £14000+ on my Egg card when the rate was a good low 7.8%. When things started hitting the breaks with the credit industy (at least three years ago from what I remember) they suddenly increased their rate to 28.9%!!!!!!

As I couldn't pay this large an amount as a lump I've been paying the minmum each month for the last few years.

Now I've come into a reasonable inheritance and can pay a large portion of this money off. But still will have a £5000+ debt.

But was it lawful to increase the rate to such an extortionate amount on an existing debt? I can imagine them saying any future credit used on this card would be charged at a higher rate, but surely the existing debt was taken out when the interest was reasonable, but putting the rate up to nearly a third when you know you've got somebody by the short and curly's isn't fair (I tried applying for 0% cards over the last few years, but all were rejected even though I've never missed any payments, just know the credit companies are all basically a big set of rich !!!!!! clubs all having a laugh at my expense).

So surely I've been paying 20% each year that I shouldn't have???? Which surely means a good £3000+ a year I've been giving Egg that they have robbed from me!!!! Can that be legal?

moonrakerz

I really wish I had a fiver for everytime that I have read on this site "it is isn't fair".

You ran up this huge debt without reading what you signed up to - yes many of the financial institutions are rogues, but they don't have to try very hard to make a VERY good living !

"Can it be legal" - yes ! If you think not, get a lawyer - you must have a bit of spare cash on your card that you can use to pay his, even more extortionate, fees..................

danouk

houndofculaine wrote: »

But was it lawful to increase the rate to such an extortionate amount on an existing debt?

Yes it is lawful. You signed a variable rate credit agreement, and they varied the rate. Perfectly legal.

They are required to notify you in advance, typically done on the statement, and you are entitled to reject the rate increase within 30 days of being so notified, close the account and pay down the balance at the existing rate.

YorkshireBoy

danouk wrote: »

...you are entitled to reject the rate increase within 30 days of being so notified, close the account and pay down the balance at the existing rate.

To be fair though, that's a very recent development. The OP has had his card many years, so the 'damage' was done long ago.

To the OP, wasn't there ever a time when you thought "hang on, this is getting out of hand"? If not the first month you couldn't repay in full, surely at the £3K, £4K, £7K, 10K, £12K markers? I find it very difficult to see how someone could be so reckless! No doubt there's (what you would call) a valid reason for the debt? If so I'd love to hear it. In the meantime, look up the definition of the word 'variable'...and then you'll see why what they've done is both lawful and legal.