Negotiating better APR

MikeyBe

Being totally honest, over the years I've had a checkered credit history. However, around 10 years ago, I made the decision to "go straight".

8 Years ago I managed to get a Halifax Clarity card to aid spending abroad on holidays.  Originally that had a credit limit of £250 with an APR of 29.9%.  Over the past 8 years I've never missed a payment, always paid on time and kept within my credit limit. This has seen my credit limit increase to £1500.  Ok, not much by many peoples standard, but enough for what I need.

Unlike my credit limit, the APR has kept the same over the years - except the past months where the APR has increased from 29.9% to 31.9%.

Is it possible to negotiate the interest rate?  I spoke to Halifax and they refused to even discuss the matter - saying the APR is fixed on opening the account and will always be a fixed rate above the base rate.  They say the only way to get a different APR is to close the account and apply for a new card.  Since this is the oldest account I have, I'm loathed to do this and really don't understand why they are so inflexible.

Are they just being awkward with me, or do they really never modify the APR on an existing account?  I also have a Barclaycard that I use for day to day spending in this country with an APR of 23.9%.

Thanks

Brie

The problem is that you will be talking to people who have very little authority to do anything more than chat about your account.  I would suggest the easiest/best thing to do is to walk away and apply for something else.  That said most cards seem to be charging a lot right now.

MattMattMattUK

MikeyBe said:

Being totally honest, over the years I've had a checkered credit history. However, around 10 years ago, I made the decision to "go straight".

8 Years ago I managed to get a Halifax Clarity card to aid spending abroad on holidays.  Originally that had a credit limit of £250 with an APR of 29.9%.  Over the past 8 years I've never missed a payment, always paid on time and kept within my credit limit. This has seen my credit limit increase to £1500.  Ok, not much by many peoples standard, but enough for what I need.

Unlike my credit limit, the APR has kept the same over the years - except the past months where the APR has increased from 29.9% to 31.9%.

Is it possible to negotiate the interest rate?  I spoke to Halifax and they refused to even discuss the matter - saying the APR is fixed on opening the account and will always be a fixed rate above the base rate.  They say the only way to get a different APR is to close the account and apply for a new card.  Since this is the oldest account I have, I'm loathed to do this and really don't understand why they are so inflexible.

Are they just being awkward with me, or do they really never modify the APR on an existing account?  I also have a Barclaycard that I use for day to day spending in this country with an APR of 23.9%.

Thanks

No, it is not possible to negotiate the rate, they offer you a rate, that is it. If you apply for a new product they will offer you a rate at the time, it will rise with BoE rates, they are linked and fixed. 

You do not need to close the account, just apply for a new one and see what happens. If you are paying the card in full every month, which is what you should be doing as you talk about having now gone straight with regard to debt, then the interest rate is irrelevant anyway. 

MikeyBe

MattMattMattUK said:

You do not need to close the account, just apply for a new one and see what happens. If you are paying the card in full every month, which is what you should be doing as you talk about having now gone straight with regard to debt, then the interest rate is irrelevant anyway. 

I only really use this card while abroad, so for a significant part of the year it sits with a balance of £0.  However, when we go abroad I'll spend on it then pay it off over the following few months when we return.  Due to this the APR is not irrelevant.

It seems weird that you can discuss the credit limit, payment dates etc with the bank but never the APR...  

Marchitiello

MikeyBe said:

MattMattMattUK said:

You do not need to close the account, just apply for a new one and see what happens. If you are paying the card in full every month, which is what you should be doing as you talk about having now gone straight with regard to debt, then the interest rate is irrelevant anyway. 

I only really use this card while abroad, so for a significant part of the year it sits with a balance of £0.  However, when we go abroad I'll spend on it then pay it off over the following few months when we return.  Due to this the APR is not irrelevant.

It seems weird that you can discuss the credit limit, payment dates etc with the bank but never the APR...  

aside of tracking the BoE base rate, it is very rare for APR on an existing account to change, but it does happen some time. If you do spend on holiday on this card without having the funds to repay it (not seen very well on these boards, especially at those Cc rates) when the relevant statement is due, maybe a strategy would be to apply for a 0% balance transfer card and transfer as much of the amount over as the new limit would allow 

PS: the APR is how they make their money, “negotiating” the credit limit increase their risk but potentially will earn them even more money as you increase your borrowing. Payment date can be changed occasionally not regularly and will have only a tiny impact on their earning but will be seen as a small cost to serve, it is not weird, you have just confused between those topics

cymruchris

The only card I'm aware of that the APR does actually go down is the Barclaycard Forward. It starts at 33.9% - drops 3% after 12 months, and then 2% more after a further 12 months subject to you making all of your payments on time:

https://www.barclaycard.co.uk/personal/credit-cards/forward

Otherwise for the majority of cards, you get what you're given, and then open a new account later with someone else if you want a better deal. 

MattMattMattUK

MikeyBe said:

MattMattMattUK said:

You do not need to close the account, just apply for a new one and see what happens. If you are paying the card in full every month, which is what you should be doing as you talk about having now gone straight with regard to debt, then the interest rate is irrelevant anyway. 

I only really use this card while abroad, so for a significant part of the year it sits with a balance of £0.  However, when we go abroad I'll spend on it then pay it off over the following few months when we return.  Due to this the APR is not irrelevant.  

That is really not very MSE, you would be far better to save up ahead of going, then just pay in full, rather than incurring unnecessary interest charges.

MikeyBe said:

It seems weird that you can discuss the credit limit, payment dates etc with the bank but never the APR...  

You can discuss them within predefined parameters. You can always lower your credit limit because that reduced their risk, their algorithms will have already worked out if/by how much they are willing to accept the increased risk of an increased limit. Payment dates are irrelevant to risk, etc. is largely irrelevant to risk. APR is based on risk and underlying business model, something which is well outside of the scope of someone in a call centre and is mostly fixed based on product. 

ManyWays

Your credit score benefits very little from this being an old account so if you can get a cheaper one you should consider if that would be better.

MattMattMattUK

ManyWays said:

Your credit score benefits very little from this being an old account so if you can get a cheaper one you should consider if that would be better.

Your credit score is meaningless and no one but you ever sees it so you can ignore it entirely. As for lending criteria, lenders are far less bothered about accounts being old, they just do not want to see lots of recent applications. 

sourcrates

Roxy Music 🎶 once had a hit with the song “slave to Love”.

Just like Roxy, you maybe considered a slave to your bank “please sir, can you lower my APR”.

Do you not think it might be time to cut the chord, break the chains, stop using a banks money 💰 for your holiday spending.

Ever considered a pre-paid card?

Load it with your own saved up cash, then you won’t need to worry about APR’s or how much interest your paying them, just an idea.

born_again

TBH. The only way to negotiate a lower rate, is to say you can no longer afford the payments. They will then try to agree to a payment plan. 
Which entails card being stopped, they waive interest. As well a massive effect on your credit history & chances of getting credit going forward.

Of course this will not really work in OP's case given they hardly use the card most of the time.