Barclaycard Increasing my Interest Rate - My options?

SpacemanSpiff

Hello!

I got a letter this morning from Barclaycard which stated that they would be increasing my APR from the current 14.9% to 19.9%. Needless to say I was not pleased to hear this. I have an excellent credit history (did a credit check with Experian) and have never missed a payment on my card, usually paying much more than the minimum amount.

The card has debt on it, around £1,000 to £1,500, but I have slowly been reducing it. It's more than I can pay off in a single month but my outgoings on the card, including interest, is less than I pay off every month.

I like Barclaycard. I like the online management software and I have had no problems with the company but I resent paying 19.9% when I can see cards at 9.9%, 12.9% and 16.9%. So I guess I am going to have to move but what are my options? Here is what I have considered:

• Get a card focused on Balance Transfers. Take advantage of the 0% and pay it off quicker.
• Get a card at 12.9% or 9.9%? Would I stand a good chance of being approved for such a card with my credit history or should I go for 16.9%? Advantage here is that I would rather have a low APR for good than card hoop every year or so. I would still transfer balance to this card but the interest would be less.
• Is there any recourse I can take with Barclaycard? They have cards with much lower APR than 19.9%! There is one at 6.9%!!!! I understand they won't move my existing balance to a lower APR but if I paid it off....

Any advice?

Cheers!

izools

Reject the increase.

They will freeze the interest at the current rate but you won't be allowed to make new purchases etc on the account.

You call them and say you are "Opting Out" of the increase. They convert the account to repayment only. Your statements continue in the usual fashion and once you have finished repaying the debt at the current 14.9% the account closes.

Simples

SpacemanSpiff

izools wrote: »

Reject the increase.

They will freeze the interest at the current rate but you won't be allowed to make new purchases etc on the account.

You call them and say you are "Opting Out" of the increase. They convert the account to repayment only. Your statements continue in the usual fashion and once you have finished repaying the debt at the current 14.9% the account closes.

Simples

I thought about that but then I would still want another card...Which would mean I would have two to manage concurrently, admittedly one in which I would be only making repayments and the other which should be paid off in full.

However If I am getting a new card why not transfer the balance on it, probably pay lower than 14.9%, and make it all easier to manage?

Really bothers me tbh. They have lower APR cards, why jack up my APR and risk me leaving when I have made every payment on time! Surely I am more profitable to them paying the same APR as I do now and staying as a customer than leaving altogether...

I was thinking of the Halifax Clarity card btw. 12.9%. There is a Capital One card at 9.9% but not sure if I would be accepted for that...

abitwild

Another option: call Barclaycard and reject the increase, and they may 'offer' to maintain your account at its current rate. This has happened to me with Halifax and LTSB: on both occasions the call resulted in a positive outcome for me.

There may also be a way to prevent this happening in the future: setup a standing order for £1 per month over and above your minimum payment.

I can only offer my own experience. First case: with Halifax, I have a 'lifetime' fixed balance rate of 2.9%, that I am repaying as slowly as possible. Since late 2007, every six months, I used to receive a letter stating my standard rate would be increased from 9.9% to 12.9%. I would call Halifax, and negotiate to remain at 9.9%. The repayments on the Halifax card are only 1%, so very little capital is being repaid, and I want to keep it that way. However, I noticed on my Experian credit file about 18 months ago that a record was being made of whether I only paid the minimum payment. I setup a standing order for £1 per month to the card in addition to the direct debit: my credit file no longer flags 'minimum payment'. More importantly, and less time consuming, I haven't had a letter from Halifax for more than 13 months now.

Second case: I have a LTSB Airmiles card that I typically repay in full. Six months ago, I took advantage of their '6 months 0% offer with a 3% fee (so, 6% interest, but with around £270 airmiles: it made sense). I only repaid the minimum for those six months. Lo and behold, this week, I received a letter increasing my rate from 12.9% to 14.9%. Quick phone call, and the rate has now been maintained 'for at least' the following six months. Though this might be because the big chunk of debt was cleared, I'm more inclined to suggest it's the computers doing the work, and humans are often cleverer than computers!

Thus,

1. Suggest you call Barclaycard, and if you are politely mannered, you might be able to negotiate remaining on your present rate for at least six additional months.

2. Ensuring you consistently repay more than the minimum payment on a card (even if it is just £1 more than the minimum) over a period of more than six months might 'beat' the computer and counter this new cycle of 'rate jacking' that is now more common.

SpacemanSpiff

Cheers!

I actually pay way over the minimum amount each month and have do so every month without missing a payment. They jacked my rate up anyway!

abitwild

In this case, then clearly I am mistaken! Computers 1 Humans 0.