Contesting Barclaycard interest-rates hike?

Watchwithinterest

My partner has recently been told that the interest rate on his Barclaycard is shooting up by 5 per cent to almost 20%. He makes his payments on time, and remains in full-time employment, so we can't understand why they're suddenly trying to squeeze him for more money - especially when the base rate remains so low. Has anyone else been hit by similar Barclaycard rates increases? A contact of mine is a journalist and says he'll take a closer look into it if it turns out not to be an isolated case. Drop me a line here, or at [EMAIL="watchwithinterest@hotmail.co.uk"]watchwithinterest@hotmail.co.uk[/EMAIL] if you want to chat privately. Also if anyone has had any luck overturning this kind of rates increase, please let me know how you did it? Thanks.

Fruit_and_Nut_Case

Watchwithinterest wrote: »

My partner has recently been told that the interest rate on his Barclaycard is shooting up by 5 per cent to almost 20%. He makes his payments on time, and remains in full-time employment, so we can't understand why they're suddenly trying to squeeze him for more money - especially when the base rate remains so low. Has anyone else been hit by similar Barclaycard rates increases? A contact of mine is a journalist and says he'll take a closer look into it if it turns out not to be an isolated case. Drop me a line here, or at [EMAIL="watchwithinterest@hotmail.co.uk"]watchwithinterest@hotmail.co.uk[/EMAIL] if you want to chat privately. Also if anyone has had any luck overturning this kind of rates increase, please let me know how you did it? Thanks.

Dozens of people have mentioned this around here. Presumably lots more who haven't. It's a commercial decision by Barclaycard. They can pretty much choose what to charge an individual depending on their own unpublished criteria. Your partner is at liberty to reject the rise and close the card to further borrowing while continuing to pay back any remaining balance.

Titan_Uranus

Watchwithinterest wrote: »

My partner has recently been told that the interest rate on his Barclaycard is shooting up by 5 per cent to almost 20%.

If you don't like it, reject the rise, pay it off and get a different card.

bengal-stripe

Watchwithinterest wrote: »

He makes his payments on time, and remains in full-time employment, so we can't understand why they're suddenly trying to squeeze him for more money

Presumably his limit is almost maxed out and he only pays minimum payments (and if he pays more, he uses that money the same month for new purchases). Anyone hovering near the limit of his card for months on end shows debt-stress.

He can reject the rate rise and continue paying his debt at the old rate. But then, he cannot use the card any more for new purchases (which might be a blessing in the long run).

andy1886

I am on a dmp and have been since May 2010 and my interest had been frozen but this month my statement shows me half my payment has been swallowed up by interest . Don't want to start a debate about why someone who can't handle money correctly should get out of paying interest that customers who use their account as they should , have to , just wanted to add that I have had interest reinstated to find out if I was the only one or anyone else on a dmp has had the same treatment .

opinions4u

A contact of mine is a journalist and says he'll take a closer look into it if it turns out not to be an isolated case.

Credit card companies have been varying interest rates on variable rate credit card agreements for decades.

Of course it isn't an isolated case. There's over 40 years of scandalous varying of interest rates been going on. Shocking stuff.

izools

opinions4u wrote: »

Credit card companies have been varying interest rates on variable rate credit card agreements for decades.

Of course it isn't an isolated case. There's over 40 years of scandalous varying of interest rates been going on. Shocking stuff.

I know, right? Varying the interest rate on an agreement the customer agrees has a variable rate. Whatever next...

Nanny state has provision in place for this however, OP.

All your OH needs to do is call up MBNA and advise that he is "Opting out" of the rate increase. He won't be able to spend any more on the card but he will be allowed to continue repaying the card at the same pace at the same APR he is now.

This won't have any effect on his credit file / credit standing whatsover.

hellome11

BC raised mine from 12.9% to 16.9% then to 21.9%.

I wasn't aware of the opt out so just accepted the first one, after receiving the second hike letter I read up on this site then called them to close the account. They emailed me about a week later saying that I was eligible to stay on my current rate of 16.9%. (I've had it 10 years, never missed a payment etc, although the balance is huge so they're making a fair whack off me still!)

Anyway, thank god for this site or I'd be paying an extra 5% from January:T

Watchwithinterest

Thank you for your helpful comments. I have suggested to my OH that he closes the Barclaycard account to freeze the interest rates. However, he travels fairly frequently so a functioning credit card is essential, and I don't know how easy it would be for him to get another card while the Barclaycard is frozen. Perhaps that's the next thing we need to look into.
We are complaining to Barclaycard and the FOS anyway as a matter of principle, as we think it's disgusting Barclaycard would try to squeeze more money from any customer in the current difficult economic climate. I'll let you know how we get on.
Hellome11, if you don't mind me asking, how far apart were the two interest rates hikes? I hope we don't have another one on the way...
Thanks!

[Deleted User]

Why would you escalate it to FOS? What they've done is perfectly legal and reflects the increased risk. As you say, it's a difficult economic climate, which means more people are defaulting. So rates are going to rise.

Every tim a spurious claim is sent to FOS, it just increases the rates further for everyone.

opinions4u

Watchwithinterest wrote: »

We are complaining to Barclaycard and the FOS anyway as a matter of principle

Barclaycard are giving you an option: Opt out of the rate change and stop using the card, or accept the rate change and continue using the card.

As long as they have done that, the FOS have no power to tell Barclays what rate to charge you.

as we think it's disgusting Barclaycard would try to squeeze more money from any customer in the current difficult economic climate.

Do you not get it? It's a variable credit agreement. That means that the rate can vary. They have given you notice of variation as they are required to do. It's no different to M&S "disgustingly" putting up the price of socks. Or McDonalds adding 30p to the price to a double sausage and egg McDeath breakfast meal. Except these companies don't warn you in writing.