Confusion over credit rate

naturalsuperwoman

Hi,

I wondered if anyone could help to explain to me why my credit rate is going up on my Halifax credit card. I had a letter today stating that the rate is increasing as they have recently reviewed my account and noticed that my credit score has changed recently and they have looked at this and my previous history with them to calculate a new rate. I originally used this credit card as an interest free option and have been snowballing my other credit cards whilst paying off the minimum repayment on this card.

They then suggest that if they don't hear from me by January they will automatically change the rate; they offer the option of paying off the outstanding balance as the current rate; however they will close the account and I can continue to pay off the balance every month until it is repaid and I can't continue using my card. I've never used this card to purchase anything anyway so that's not a problem.

Why has this happened? I have always paid at least the minimum payment on all of my credit cards on time. Will this affect my credit rating? I was contemplating getting a better deal and transferring this balance but will this impact my options in relation to getting another credit card? This is all a bit confusing. Any help would be appreciated in working out why this has happened.

Thank you!

Naturalsuperwoman

YorkshireBoy

Are they moving you to a personal rate plus BOE base rate? Or simply lifting your APR?

naturalsuperwoman

As far as I can tell they are increasing the 'standard interest rate' which is made up of 'personal interest rate and the Bank of England base rate' - this is according to the information on the back of the letter.

Thanks

Naturalsuperwoman

YorkshireBoy

So you were already on the personal rate plus BOE, not being moved to it as my letter today said?


Either way, it looks like something has spooked them. They'll take a monthly feed from the CRAs which will show your other commitments and account management. They've simply re-priced for risk.

20aday

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

As YorkshireBoy points out something being reported to the CRAs has spooked them.

I'd suggested obtaining your free report from Noddle and Clearscore (and your £2 stat. report from Experian) and see if there's anything untoward on there.

*Might* be because you're only ever making the minimum repayment but don't take my word for that.