Virgin C/C APR going from 16.8% to 24.9%

dblue75

Just received a letter from Virgin that my C/C rate will jump from 16.8% to 24.9% for purchases from May !!!

Either accept the new rate OR refuse it and pay the card off.

I have 4K outstanding on it due to urgent car repairs and a wedding in St.Lucia.

Do I accept the new card rates and keep it for emergencies OR call them and refuse it, stay at the old rate and continue to pay it monthly until it is paid off and then close it ? I can't do a balance transfer at present or get a new deal card or loan as I have a bit of debt being paid and overpaid every month to clear things quicker.

Any suggestions ?

Tixy

I would definitely opt out of the rise and carry on paying off the existing debt at the current APR.

But I guess it really depends on
1) whether you desperately need to make more purchases on credit soon
2) how quickly you can pay off the current balance.

dblue75

I am not desperate for credit and am currently paying just over £100 per month at present. This will rise when I have paid off a few other debts and free up a few hundred pounds a month by end of June.

carslet

can you refuse to accept the new rate?

i thought they did not give you a choice, i have some on a virgin CC but i just paid a big chunk off,

YorkshireBoy

How long will it take you to pay off the £4K (either by paying monthly or by BT to another card)? And what will be the average balance until you do either of the above? From this you can work out the increased cost of keeping the card.

What are the chances of further emergencies (excluding weddings!) occuring between now and the time taken for the above? And if they do occur, how will you finance them if you 'close' the card to new spending?

It's then a very simple cost/benefit analysis.

dblue75

I have £3800 O/S on the card to date. I cannot do a balance transfer to another card. I have applied for one or two but been unsuccessful.

As for emergencies....you can't predict that.

Yes, the letter states I can refuse the new rate and that I will continue to pay the card off at present APR until the balance is zero and then the card will close and that I will not be able to make any purchases etc once it is refused.

YorkshireBoy

dblue75 wrote: »

I have £3800 O/S on the card to date. I cannot do a balance transfer to another card. I have applied for one or two but been unsuccessful.

Do you have some headroom on other cards with a lower APR, or even a promotional rate, to take at least some of the Virgin balance?

As for emergencies....you can't predict that.

It was a rhetorical question, asked to make you think about it.

Tixy

carslet wrote: »

can you refuse to accept the new rate?

i thought they did not give you a choice, i have some on a virgin CC but i just paid a big chunk off,

All credit card companies have to give you the option to opt out of the increase in an APR, within 60days - and if you do you are allowed to continue to repay the debt at the old APR.

Tixy

dblue75 wrote: »

I am not desperate for credit and am currently paying just over £100 per month at present. This will rise when I have paid off a few other debts and free up a few hundred pounds a month by end of June.

Given the rate you are paying it off I would definitely opt out. If you could pay off in a few months and wanted to keep the card for future potential promotions it might be worth accepting the increase, but as you can't opt out.

Actually before you opt out you might want to try ringing them and asking them to reconisder keeping it at the existing rate (its only a slim chance but doesn't hurt to try).

dblue75

Thanks for your help and advice guys. I appreciate it. I am going to call them just now and refuse the new rate. If an emergency crops up? I will just have to deal with it at the time. Over 8% is quite a big jump.

I wish I could whack lump sums into it and pay it off quickly but that is impossible at present. So I will start paying between £200/£300 to it p/m from June when other debts clear.

YorkshireBoy

dblue75 wrote: »

I am going to call them just now and refuse the new rate.

Before you refuse it, try an initial approach of "I'm going to BT the debt away to another of my cards which charges only 18.9% APR. How much is the current/settlement balance please?"

You never know they may agree to undo their recent decision.

Only if you're getting nowhere do you formally refuse the rate increase.

Good luck!