Reducing Credit Card Interest

speeddial

Has anyone on here had any experience in asking their Credit Card Provider to reduce the interest being charged on their card? And if so, do they have a template letter?

I have been administering my own DMP and up until recently had an arrangement with Egg to allow me to pay a reduced monthly amount and they also stopped interest and charges for 6 months. Now the arrangement is up they want to revert to normal repayments and interest.

To give you some history on the card - Egg were very sneaky in how they operated the card, originally the interest rate was 16.9% and then they hiked it up to 26.9%. I think I got the standard letter advising me I could close the account and pay off the balance at the previous interest rate but I ignored it as I wanted to keep the card. Anyway 6 months after that I got a letter from Egg advising me that they were closing the account, it was about 2 years ago when Egg were closing accounts for all sorts of weird and wonderful reasons.

If I had have known they were going to close the account in 6 months I would have closed it myself and paid off at 16.9%. The balance on the card is 4k and I am struggling to make inroads into it paying minimum each month but it would help if the interest rate was a bit lower.

Any advice gratefully received

Tixy

Are you still paying reduced amounts? not the full minimum payment?

If so there is a national debtline template to ask a creditor to reconsider freezing interest - I would start with that and try to get it frozen again. http://www.nationaldebtline.co.uk/england_wales/debt_advice.php#6

If you have returned to making minimum payments then occasionally people have had success in getting a rate reduced on an open card by phoning up and asking.

If you have returned to making minimum payments on this card - is that inline with pro-rata offers to each of your creditors under your DMP? On reason creditors don't accept DMPs or don't agree to freeze interest is if you are not treating all creditors fairly.

speeddial

Hi Tixy

I'm back to paying full amounts on the Egg card and most other arrangements are back to their minimum payments. Some agreed to 6 months respite, some agreed to 12 months so they are still rolling so I will avail of the arrangement as I am not quite back on track but nearly there. Others haven't even contacted me and have frozen interest and charges and accepted reduced payments indefinitely. I guess, in fairness, sooner or later I am going to have to tell them to start charging me interest again lol.

I understand it affects my Credit Report but to be honest it is pretty knackered at the minute so the interest free credit is pretty useful.

It was more the way Egg upped the interest rate and then 6 months later closed the account, if I knew they were going to close it I would have closed it myself before the interest rate hike and paid it off. I suspect they probably knew they were going to close it and wondered if anyone else had experienced the same thing and successfully argued the point and got the interest rate reduced.

Also the account shows as a zero balance and settled on my Credit report even though there is a few thousand on the card, it's been shown as closed and settled on my report since they closed the account, Egg didn't even report the reduced repayment plan on my credit report. Strange.

ElmerFudd

I called one of my credit card companies a few years ago who were happy to reduce my interest to keep my custom (but then they raised it again last year). I haven't tried this year but it may be worth me calling them again.