£4000 on CC and interest rate going up!

Gem2405

Hello, I'm new to all this.
Hope someone can help.

I have £4000 on credit card and recently got a letter from my credit card company (Halifax) telling me that they were putting my interest rate up because my credit rating had changed and I was now higher risk. I'm not sure why this is. I am not a homeowner. I rent privately.

The last time I tried to apply for another credit card (in order to transfer my balance) I was rejected. The only reason I could think of was because I am a LTD company. A small company of just me. (I'm a freelance designer).

I am wary of applying again for another card as I believe each time you apply for a loan or credit card it affects your rating?

The last time I checked experian (5 years ago) my credit rating was in the 'excellent' bracket. However, my credit card balance was then only £1000 ish.

I'd really like to clear this debt (or at least bring it down to around £1000) before it gets out of hand.

Any help or advice would be greatfully received!

Many thanks!

RichardD1970

http://www.moneysavingexpert.com/reclaim/credit-card-interest-rate-increases

izools

You can opt out of the increase. Doing so won't affect your credit rating in any way shape or form.


Also - is this the only credit card you have? Do you have any other credit agreements, cards, loans, etc?

I wouldn't have thought the fact you work for your own LTD company of one would affect your credit rating greatly as your employment status is still "Employed"; not "Self Employed".

jonesMUFCforever

OP - from post 1

5 years ago I had a balance of £1000 o/s

Now I have £4000 o/s

Have you ever cleared the card in that time or is hard core debt?

I can see why they are thinking you are now a higher risk - can you?

CLAPTON

first thing to do is to actually check what your credit files actually say

Gem2405

Thanks for the replies,

To clarify:

I used to have two credit cards.

Had about £1000 on one and about £2000 on this one.

Within the last 5 years the balance on this one has been from £1000 to £2500 back down to £800 then up to £2000, then I transferred the £1000 from the other card to this one as the 0% on that one was coming to an end. I cancelled the other card when it was clear and cut it up. So then I had £3000 on this card and now its £4000.

They did say I could opt out of the rate increase, but to do that I had to clear the balance and close the account.

gotmurked

Gem2405 wrote: »

They did say I could opt out of the rate increase, but to do that I had to clear the balance and close the account.

They should know better! You CAN opt out of the increase and keep paying the card down as you normally would, the opt-out would just prevent the ability to keep using the card facility for future purchases / expenditure. I would be having words with the card issuer.

izools

I think you've misunderstood.

When you opt out the account is closed to new spending.

The repayment terms remain the same - e.g. interest, minimum, etc.

Gem2405

Oh OK I see. Yes maybe I did misunderstand them. It does worry me that I wouldn't be able to use my card for spending though as I don't have another credit card. Its useful for when I'm waiting for payment from clients.

Just checked my credit report and it all seems fine. It was in the "Good" category!

Thanks again for all the help!

CLAPTON

Gem2405 wrote: »

Oh OK I see. Yes maybe I did misunderstand them. It does worry me that I wouldn't be able to use my card for spending though as I don't have another credit card. Its useful for when I'm waiting for payment from clients.

Just checked my credit report and it all seems fine. It was in the "Good" category!

Thanks again for all the help!

score means nothing

what do your credit files actually say?

izools

Gem2405 wrote: »

Oh OK I see. Yes maybe I did misunderstand them. It does worry me that I wouldn't be able to use my card for spending though as I don't have another credit card. Its useful for when I'm waiting for payment from clients.

Just checked my credit report and it all seems fine. It was in the "Good" category!

Thanks again for all the help!

Well it's a choice you have to make on your own - accept worse repayment terms so you have a (expensive) safety net,

or ensure you won't have to pay the lender more than you are already to service your debt.

It might be time to ditch & switch. What does this say? :-

https://letmechoose.barclaycard.co.uk/?source=homepage-rhnav