3.9% APR loan is misleading?

YorkshireBoy

So you're planning to pay £4.5K for holidays?

Or you were going to settle the card and repay the additional and unnecessary £4.5K immediately, and then spend your own money on the holidays?

I think in your shoes I'd either be doing without the holidays and settling the debt or, less preferably, BTing the debt to another card.

YorkshireBoy

Silenciosa wrote: »

I have to say I wouldn't have a clue about how to go about changing to another card provider

See the link above..."balance transfer credit cards"

Gaz83

Silenciosa wrote: »

All I want to be told is "this is the main reason why we offer a higher rate" or "if you change this then we can revise the offer".

You won't ever be told this by any lender, and nor will anyone else applying for credit.

If lenders publicised their own lending criteria then all that would happen is every single applicant would tailor their application to meet the lender's ideas of a 'perfect' customer.

Won't happen.

Silenciosa

YorkshireBoy wrote: »

So you're planning to pay £4.5K for holidays?

Or you were going to settle the card and repay the additional and unnecessary £4.5K immediately, and then spend your own money on the holidays?

I think in your shoes I'd either be doing without the holidays and settling the debt or, less preferably, BTing the debt to another card.

The £4.5k would be kept as a reserve. I would really just want to use the low APR to clear off the card. The low APR is only on loans from £7.5k to £15k so need to ask more than I need. The bank needs a reason so the reason being given is holidays since I hopefully will manage to go and visit family at some point anyway.

If the loan is offered at a 3.9% then the interest is only about £480.00 or so. As a HSBC advance customer I am also allowed 10% cashback on any interested paid on the loan provided is less than 60 months and not repaid early.

Am considering clearing off the c/card by asking money to mum or dad (which I really don't want to do but...) and then reapplying for the loan. If they tell me that the reason the APR offered is higher is because of the card then I can find a way to clear it. But if I clear it and then they still only offer the higher rate then I might get into trouble which I want to avoid. Hope that makes sense :x

Cornucopia

It's likely that lack of borrowing may be a factor. Generally, banks prefer people who have borrowed and paid back without incident to those who haven't borrowed at all.

You do not "transfer" a credit card, as such. You just open a new one, possibly by selecting one that has features you want and are likely to be accepted for. Then you can transfer the balance.

Silenciosa

Cornucopia wrote: »

It's likely that lack of borrowing may be a factor. Generally, banks prefer people who have borrowed and paid back without incident to those who haven't borrowed at all.

You do not "transfer" a credit card, as such. You just open a new one, possibly by selecting one that has features you want and are likely to be accepted for. Then you can transfer the balance.

I have read about that somewhere and in a small way that is why i have decided to keep the credit card.
I have done other small loans and they were all fine.

Previous closed accounts (settled accounts)


Table showing previous closed accounts (settled accounts)
Lender Type Current status Balance Updated
Black Horse Loan Closed £0 04/07/2010
Black Horse Loan Closed £0 30/06/2013
Black Horse Loan Closed £0 01/12/2013

Only the credit card remains. I am not 100% sure on my friends details for previous loans - if any. So that could account for his offer I guess. They truly don't make it easy :x

CLAPTON

I don't understand how you are struggling to pay a relatively modest amount of debt off, but you say you can pay from the holiday out of normal spending.

maybe use that 'spare' money to pay the debt off

cut down on spending and pay the debt off asap

then start to save and never ever borrow again except for a mortgage

bargainbetty

You don't seem to be listening to people about making constructive financial decisions for yourself. These are the answers in no particular order:

1. A loan provider uses their own criteria to assess your suitability. They don't have to offer you anything at all. You have no legal right to demand any more information than that.
2. A bank doesn't have to tell you how to change banks. You are a grown up and are expected to have the common sense to walk into a different bank and ask them for an account.
3. Taking out more than you need and doing anything other than making an immediate overpayment to ensure that you don't spend the money is reckless. If you overborrow to get a rate, pay back everything to reduce the interest you will pay overall - you will pay for that 'reseerve' and at a far higher rate than any savings account could give you.
4. Taking out a loan over three years for a holiday is just daft. Save up for it.
5. There is plenty of information online about applying for other credit cards with better rates and doing balance transfers. See item 2 for advice on whose job it is to look.
6. Look at your income and expenditure to see where you can make savings to pay off the debts properly. Cut up your cards and don't be tempted to use them again.

Sorry to be harsh, but you need to be aware what you need to do for yourself. Banks are businesses, they are not there to take care of you.

Brambleberry

Hi there Silenciosa,

You have been given some good suggestions by the other posters here - can I suggest your next steps should be to get pencil paper and calculator and work out exactly how much / how long it will take you to pay off your credit card as it stands and with your current rate of repayment.
Do this also with any possible loan or balance transfer you are considering.

(If you are still using your card each month, then it will could take even longer than you expect.)

I would advise against resorting to BOMAD unless you can't get a 0% transfer, it is far more satisfying to sort out your finances yourself, and also do think about what it is costing them in lost interest, their money is less "free" overall than a 0% transfer deal would be.

Do you have any savings? You could post a SOA on here to get some advice on how to free up more cash to pay down your debt faster.

Hth

Silenciosa

Thank you all for your advice.
I do understand that I should just find a way to clear off the card and stay away from it. However I am a girl who lives on her own with a pet and it can be a bit scary to know that there is no money in the account hence why I haven't cleared off the card yet and just wanted to take a loan to make it a bit faster. The payment for the c/card comes off from the account soon after payday hence I kinda take it off my mind most times. If I could have it at a lower rate by borrowing more than I needed then it seems a fair exchange as that extra money can also be kept aside in case of any emergency. I haven't taken any loans for holidays over 3 years. That was a simply reason given to HSBC for why I wanted the loan higher than my c/card balance but the reality is I was requesting a higher loan due to the lower rate. I am hoping to go away to see family at some point as mentioned and that should cost no more than £1k including flights so I am not overspending on holidays.
My main query was simply if anyone could see a reason why I am being offered a higher rate. I appreciate all the suggestions and will hopefully try and change the c/card status by talking to parents and if they are willing to help then perhaps apply to pay them back asap although they won't wait too long for it hence the needing a loan for it.
Again I truly appreciate all the advice and will also be looking at transfering the balance if I can't get help from the family.
Thank you.