my cc interest rate is going up, time to make an important descision

Mupette

I have a cc with Natwest, as far as my credit report shows, i don't miss payments, or late, and they like me because i pay min payment each month, never got into being sensible and paying off the balance each month.

The cc is a limit of £650, now and then with late payment charge i go over currently account is £667 (yes sometimes i am late in paying or it takes ages to transer funds from my nw account to my nw cc via online banking)

although i rarely use the card now, i was more in the hope of building back up the £650, as in reality i have spent over the years someone else's money.

my credit rating generally is excellent apart from the fact i have moved last year and this just shows as 'fair' where everything is shows as 'excellent' but the score is only 357

5 searches on my address, one is virgin when i approached for bb, only to be told they could not connect me and so i did not take up a service with them (all about digging up holes)

exprian have told me this type of search stays on account for a year, same as eon who were the supplier when i first moved in (may last year) who i promptly move account to another suppler.

Anyhoo just received a letter from nw cc

Advanced notice of an interest rate change on your natwest credit card.

currently interest rate is 25.69% p.a. they will move it to 26.48% works out aparently every £100 i owe i pay an extra £0.07 per month so 36p extra per month.

They have given me an option to opt out and paying off the balance at the existing ratem i can pay in full (not got funds for that) or in monthly installments. i have 60 days to decide as from the date of the letter (03/03/11) (notice that you don't actually get 60 days because i just got the letter Tuesday this week which was the 8th, anyhoo


do i stay or do i go, considering i though i needed a cc so it would look good on my credit file (not sure why)

experian are under the impression that because i moved less than a year ago, i would either not get or be stung with higher interest rate on any credit until i have been at this address for a good 3 /4 years.


now currently not working due to having problems with my MS, one day i would like to work again, may be forced to sooner than i think i am capable, then throw in the factor of lack of jobs etc..

so i am thinking in the future and of my financial stance (currently on esa and dla)

what would you do, would you apply for another cc somewhere else, if so who would likely give me a cc,

Also worried that if i apply for a cc somewhere else that will show up as a search on my credit file and i would not be able to apply to another for 6 months.

can someone explain in laymens terms what is my best approach now (remeber i have ms and my brain does not cope well with facts and fugures)

many thanks

izools

The difference is negligible.

I think your best effort is to run your credit card account better than you have been. £650 is a comparatively tiny balance and you should be able to make a large dent in that debt even if you were on benefits and paying a high APR.

Cut up the card, and set up a standing order to regularly repay a decent amount off the debt. You should be able to free up enough in your budget to clear this over 6 or 12 months unless you've got something very wrong with your income and / or lifestyle.

Once you've paid it off and run it well for a year or so without incurring charges or riding close to the account limit Natwest may reduce the APR seeing you as a lower risk customer.

Good luck! :beer:

Mupette

ok so keep the card for now with the new interest rate (obviously cutting card up)

make a better attempt and stick to it at repayments - pay earlier in the month not 3 or 4 days before due....

leave it as that?

6 / 12 month plan is all good and i should be able to cover that.. slight tighten of the belt but happy to do so.

review again in a few years?


OH thought i'd be better off moving to a 0% transfer, but my fear of rejection and showing on my credit file has stopped me even looking that way.

izools

Mupette wrote: »

ok so keep the card for now with the new interest rate (obviously cutting card up)

make a better attempt and stick to it at repayments - pay earlier in the month not 3 or 4 days before due....

leave it as that?

6 / 12 month plan is all good and i should be able to cover that.. slight tighten of the belt but happy to do so.

review again in a few years?


OH thought i'd be better off moving to a 0% transfer, but my fear of rejection and showing on my credit file has stopped me even looking that way.

You could apply for a 0% if you so wish but TBH with a balance that low I personally wouldn't bother. You could always give it a shot - the Creation mastercard provides for 15 months 0% and is laxley credit scored in comparison with other 0% deals.

If you get accepted, great, no interest to pay. If not, no matter, you shoulc be able to clear it relatively quickly

All good!

Mupette

Thank you for your clear explanation :T

Rafter

Mupette,

As others have said, set up a standing order or pay the minimum by direct debit so you don't get hit with any more £12 charges.

Given your work situation and given how a credit card might be useful in emergencies, I would stick with your Nat West one rather than trying elsewhere.

Once you have paid down a lot of your balance you can appeal to Natwest to reduce your rate or hopefully get something better elsewhere.

As others have said though - you really dont want to be paying 25% plus interest on things you bought months ago. If you can somehow work out how to save £12.50 from your weekly budget (£50 per month) you should be able to clear your balance in a little over a year. Then the card can just be for emergencies or spreading the cost of big events (eg christmas) over a couple of months if you cannot afford to save in advance.

Good luck

R.

Mupette

Rafter wrote: »

Mupette,

As others have said, set up a standing order or pay the minimum by direct debit so you don't get hit with any more £12 charges.

Given your work situation and given how a credit card might be useful in emergencies, I would stick with your Nat West one rather than trying elsewhere.

Once you have paid down a lot of your balance you can appeal to Natwest to reduce your rate or hopefully get something better elsewhere.

As others have said though - you really dont want to be paying 25% plus interest on things you bought months ago. If you can somehow work out how to save £12.50 from your weekly budget (£50 per month) you should be able to clear your balance in a little over a year. Then the card can just be for emergencies or spreading the cost of big events (eg christmas) over a couple of months if you cannot afford to save in advance.

Good luck

R.

Thank you

my miniumum is £13 / 14 a month and every month i pay that, if at the time of the month is i have a little bit more spare then i'd make it £30, so i think rather than just paying the miniumum each month i would like to see myself pay just that bit more each month


Thank you both