M&S have informed me my personal interest rate will increase soon from the standard 18.9% to 21%.

phranco

I've just received notification that M&S Bank will increase my interest rate to 21% in December. I'm not a new customer and my balance was fairly low until recently when I accepted a balance transfer offer from them. This change seems to be only applied to my account. Their standard interest rates are not changing. I've never missed a payment and regularly pay more than the monthly minimum .

Is this normal?

bradders1983

Lenders are tightening up at the moment. Are they giving you any options in terms of rejecting the increase (which would probably close your account from further spending)?

D3xt3r5L4b

Yes it’s normal. 

[Deleted User]

It'll be applied to thousands of accounts, not just yours.  Accounts aren't micro managed that way.

phranco

Bradders1983

bradders1983 said:

Lenders are tightening up at the moment. Are they giving you any options in terms of rejecting the increase (which would probably close your account from further spending)?

They are giving the option of closing the account, but the wording of their letter makes me think the interest rate rise is specific to me - particularly since I find nothing online about an imminent rise.

Their letter says: "As part of our ongoing commitment to customer service we regularly review customer accounts, considering things like how much a customer pays of each month; the amount of debt a customer has with us or other lenders; or the number and amount of cash advances requested. As a result of a recent review, we're writng to let you know that we'll be increasing the interest rates charged on your M&S Credit Card".

I do have multiple credit cards - with related balances. However - if they were concerned about my debt level - I'd expect them to ask for larger monthly payments, not increase my interest rate.

[Deleted User]

It's standard wording for all reprices.

Your terms don't allow for them to ask for greater payments unless you're in persistent debt.

The reprice helps cover the increased default rate.

born_again

So your balance offer rate will be OK. It's just the rest of the spending that will be effected.
You can usually say you are not happy and no longer need the card and just continue to pay it off.

As you said you have now added to your debt with them, so they are covering this off this extra risk, with a increase in the interest rate

k12479

phranco said:

They are giving the option of closing the account, but the wording of their letter makes me think the interest rate rise is specific to me - particularly since I find nothing online about an imminent rise.

Rising rates are a general trend in response to the increased risk of default, not specific to you nor your card provider. e.g.: https://www.theguardian.com/money/2020/oct/15/uk-banks-plan-to-hike-cost-of-credit-card-borrowing