Credit Card Interest Rate Hike

dougbanks

I just discovered my credit card interest rate was hiked up from 18% to 28% and again to 34% (!!!) for no apparent reason. When I queried it, they could not explain why this was done and offered to immediately reduce the rate back down to 23%. However, when I asked for a refund for overpaid interest they started quoting "variable rate" policy blurb. I've had no problems with payments but I do have a high balance and pay a fixed amount monthy, more than half of which is just paying interest.

Has anyone else had this? Is it legal? Are there rules about the levels of interest that can be charged and what is reasonable? With base rates at 4.75 and falling, 34% sounds extortionate at best. What would the FSA have to say about it?

Any constructive help and/or advice appreciated. Ta, DB.:eek:

YorkshireBoy

dougbanks wrote: »

Has anyone else had this?

Loads of posters recently, and mainly on MBNA run cards.

Is it legal?

Completely legal, yes. Why do so many people think credit card providers operate illegally?

Are there rules about the levels of interest that can be charged and what is reasonable?

No. It's called 'pricing for risk', and your provider's computer system obviously thought you were high risk.

With base rates at 4.75 and falling

Whilst the BOE base rate has fallen recently, it hasn't reached 4.75% yet. It's currently 5.25%.

What would the FSA have to say about it?

Nothing!

Any constructive help and/or advice appreciated.

Shift the balance elsewhere, and preferably to either a 0% card or low rate LOB card, would be the best advice. If that's not possible, then throw every last penny at the debt and get rid of it that way.

Bismarck

In a nutshell....they charge it because they can...if you don't like it, pay up or move. The operator you're with is operating at both ends of the scale...recouping the costs of the catchy deals with the high rates at the other end that some will pay and some won't....their working model is fierce but benefits some at the expense of others.

Agrees it's not fun but you're certainly not alone on this!