Virgin CC keep increasing my interest rate

nickmack

YorkshireBoy wrote: »

That's true Nick, but I'd wager that, in the main, those who have had their rates increased up to 34.9% APR are heavily indebted elsewhere (as seen from the search) - and I include stoozers in that as well because my wife's rate was increased to 29.9% as she approached the end of a follow on 0% offer on MBNA - and that's why they've been deemed high(er) risk.

Possibly, only MBNA know the answer to this. I think the likely scenario would be that MBNA are increasing rates for those who they believe will not default (soon!) but can't afford to pay off the balance in full.

Not so if all they'll get back is interest. They're being spooked because they, or more accurately their 'systems', perceive a significant risk to capital.

As I said 'as long as you don't start missing payments', I don't see there is any increased risk to capital.

MBNA seem to be doing the job of squeezing as much out of their customers as they can once they're locked in.

I find it very difficult to believe some of the reasons people have been given by MBNA for the rate hikes. They wouldn't be the only provider to intimate the customer is to blame when it's not always the case a la Egg.

clio

whats a ad hoc search and are mbna americian by any chance??
Isn't interest back pure 100% profit for them.!!

So they get the computer to scan loads of accounts and those that pop up
are looked at futher to see if there debt is heavy. If so bang we'll have them.
sounds big brother to me if thats whats going on. poor honest workers stand no
chance against the super computers of the greedy credit card companys.

Bismarck

Isn't their model quite simple, they increase the rates because they can. If you don't like it you can leave if you pay the balance. If not, you literally pay the price. That's what they're hoping for....

LilacPixie

YorkshireBoy wrote: »

That's true Nick, but I'd wager that, in the main, those who have had their rates increased up to 34.9% APR are heavily indebted elsewhere (as seen from the search) - and I include stoozers in that as well because my wife's rate was increased to 29.9% as she approached the end of a follow on 0% offer on MBNA - and that's why they've been deemed high(er) risk.Not so if all they'll get back is interest. They're being spooked because they, or more accurately their 'systems', perceive a significant risk to capital.

I would actually agree with this, were as I have/ had a reletivly small balance on my virgin card i am no where near my limit as i'm attempting to be debt free. Capital one card is empty with a 3k limit and my rbs card is has 300 on it with a 4 k limit

A glance at my credit file would show 900 debt and limits totalling just over 10K.

I think many lenders would get nervy at this because quite simply I pay minimum pyt by DD but i'm not the best at overpaying so they may presume the small payments against large availibility of funds as risky. If I only pay min on a 300 debt they may think i'm financially struggling and if i max out the card then claim unemployment then they have very little chance of getting the full amount back.

I think its all based on generalisations and i'm not bitter, i'll switch cards shut the unused accounts what one issuer terms to be a high risk isn't what another does.

Mrs_L

I had a letter from virgin today to say they were increasing my rate from 17.9% to 27.9% so I rang them to ask why they didn't want my custom anymore as there was no way would I be using that card anymore and I would be transfering the balance and then closing the account. The lady on the phone asked me to hold whilst she spoke to a manager, she then came back to say that my rate would be staying the same and I would get a letter to confirm this. Whilst this is good I think I will still transfer balance and close account as soon as I can as there is no guarantee they won't do this again.

nickmack

Mrs_L wrote: »

The lady on the phone asked me to hold whilst she spoke to a manager, she then came back to say that my rate would be staying the same and I would get a letter to confirm this.

Which is a good illustration that these rate hikes have very little if anything to do with risk.

If the customer is a high(er) risk, how can their risk suddenly reduce sufficiently to revert the rate back, if they call up and question the increase?

clio

well done Mrs L ...

Dieselladuk

i have posted a similar issue with Virgin. it seems to be mainly an MBNA trick with regards to increasing APR.

after researching online its always blogs / forums that complain about this issue that comes back to MBNA.

Once again its the NEW CUSTOMER ONLY syndrome.

dhassen

nickmack wrote: »

If you're paying the minimum each month, you're probably either lazy or struggling somewhat.

I agree with your other points, but not with that one, you may be snowballing? I've been paying minimum on Virgin for 6 months, and I'm not lazy or struggling....

It's OK to keep it ticking over while I throw money at a higher rate card, then throw all the money at Virgin now that one's paid off.....


And to the OP, if ringing Virgin doesn't work, write a letter to complaints dept. If you're lucky like me they'll put the rate back

britmonkey

Im another one who has just had their rate hiked to 29.9% Apr, after two years.

Suspiciously Only last week I cancelled the insurance on the card, to increase repayments. Has anyone else had an increase after cancelling Insurance?

FYI when I was cancelling I had offers to selectively reduce my insurance rate, to just the elements I needed, ie, "Unemployment only" at a third of the cost.

Im current on 0% promational rate until Feb 09, and the customer loyalty lady said she cant do anything until the Apr rate is near to ending, and suggested I call again then.