34.9%!

william2806

Just had a letter from Santander, advising me that my APR was going up from 26.9% (high enough) to 34.9%; and increase of 8% or 30% more than before! I have to ask, what is there to stop the credit cards companies (the banks), after they have created the credit culture, from wringing the last drop of blood out of the people now tied to a line of credit. Yes there are rules, but are they tight enough? What is to stop Santander, in six months time upping it to 42.9% or even higher. Once again, they do what they want, us the poor people have to live with it. Surely something should be said or done about this; standard credit card rates are now regularly high 20% or low 30%, when will it stop?

chattychappy

They can only force you to pay the higher rate for new borrowings.

You can reject the rate rise - in which case your existing debt will continue at the old rate and you continue to pay the minimums (or greater) until the debt has gone. You mustn't continue to use the card in this case.

unimaginative_user_name

You have a right to refuse the increase but if you do they can stop you using the card any more and then you just pay the balance off.

I'm not aware of anything that would stop banks increasing APRs except that they need to offer attractive conditions to people with a good record of handling credit. I don't know if there's an official maximum they can charge.

On the other hand for the 50% or so of credit card users who pay their bills in full on time every month APR is irrelevant as they don't pay any interest.

opinions4u

william2806 wrote: »

Just had a letter from Santander, advising me that my APR was going up from 26.9% (high enough) to 34.9%; and increase of 8% or 30% more than before! I have to ask, what is there to stop the credit cards companies (the banks), after they have created the credit culture, from wringing the last drop of blood out of the people now tied to a line of credit.

The right for the customer, who exploited the credit culture by spending lots of money that isn't theirs, to opt out of a rate rise and stop spending on the card.

Yes there are rules, but are they tight enough?

Being able to completely block a rise gives the customer real power.

What is to stop Santander, in six months time upping it to 42.9% or even higher.

You making a phone call. Now.

Once again, they do what they want, us the poor people have to live with it. Surely something should be said or done about this; standard credit card rates are now regularly high 20% or low 30%, when will it stop?

When the customer asks them to stop.

Gromitt

I couldn't have said it better myself, O4U.

OP: Some shops offer instant credit at 360% interest and higher. People still use them, but its their choice, they know what they are paying before they take out the credit. Its the same with credit cards. A bank can't get you to spend 1K @ 9.9% and then hike the card upto 50%, knowing you can't pay it back.

chattychappy

Santander jacked the rate up on my Zero card progressively to 34.5%. I pay off in full anyway. Now I use Zero just for foreign ATM withdrawals. No fee, no loading, just interest from the date of withdrawal. 2 or 3 days interest even at 34.9% is peanuts (about 20p on £100).

Over recent months they have been making 0% APR BT offers - the most recent one being for 12 months.

If you have a good rating, OP, apply for a 0% BT card elsewhere and shift the balance. Keep Santander open (especially if its a Zero card and you travel). Having paid off the balance, you might get some offers from them too.