Aqua increased my interest rate

Sotts

So today I received a letter from Aqua saying they were increasing the credit limit on my card.   They said this is based on either not staying within my limit (I do), frequent cash transaction (I never use my card for cash), not making payments on time (always on time).   Has this happened to anyone else.  I'm confused

cymruchris

It happened to me a while ago - I'd always paid in full - never missed a payment - never paid a penny in interest - yet they wrote to me telling me how bad I'd been and the interest rate was going up, they did also infer that it was 'information on my credit file' that might have been a cause - but then I pay off all my credit cards in full every month, and haven't missed a payment on any of them - so that was tosh too. I wasn't bothered though as I never pay interest - but it does appear they do this sometimes, probably triggered by an algorithm on a computer somewhere. If you're paying in full each month - it won't matter. If you're carrying a balance - you'll need to work out a way of paying it down quicker - or transferring to another card.

Sotts

cymruchris said:

It happened to me a while ago - I'd always paid in full - never missed a payment - never paid a penny in interest - yet they wrote to me telling me how bad I'd been and the interest rate was going up, they did also infer that it was 'information on my credit file' that might have been a cause - but then I pay off all my credit cards in full every month, and haven't missed a payment on any of them - so that was tosh too. I wasn't bothered though as I never pay interest - but it does appear they do this sometimes, probably triggered by an algorithm on a computer somewhere. If you're paying in full each month - it won't matter. If you're carrying a balance - you'll need to work out a way of paying it down quicker - or transferring to another card.

I'm going to transfer to another card as soon as I've completed on my house purchase.  Funny thing is, my credit score has increased (although I know the score is meaningless to them) and there has been no others changes to my file.

[Deleted User]

Sotts said:

So today I received a letter from Aqua saying they were increasing the credit limit on my card.   

So, increasing your rate, rather than your limit?

If so, it's done on a regular basis, but on a cohort level, rather than individual. With risk levels rising across the board, you don't need to have done anything wrong to be swept up in a general rate increase.

Sotts

The annoying thing is they are constantly increasing my limit.  I don't spend anywhere up to my limit.  

[Deleted User]

That's not annoying - that's good. It's helping you build a solid history.

Sotts

Maybe it's the hard search on my credit file for my mortgage application.  Who knows.  

pbartlett

probably a silly question, but are card companies allowed to increase the interest rate on existing spend (existing balance), which presumably you spent thinking the interest rate was x% rather than y%

[Deleted User]

Yes.  The new rate applies to any balance going forward.         

But of course you have the option of closing the account and repaying the existing balance at the current rate.

cymruchris

When you do get another card - don't close this one. Continue to use it for a monthly supermarket shop - and pay it off in full. Pay no attention to whatever they're doing with interest rates, as long as you're paying in full. A long-standing account with a fair limit will help your credit history.

MovingForwards

I had it happen with a different sub-prime CC, they increased my apr due to something on my credit files. The only change was my own bank giving me a CC, I had been paying my s-p CC off in full each month.