Is it worth complaining about interest rates?

jimbo26

MBNA are in the business to make money. They offer very good 0% deals which make them very little, if any money at all.

At the end of the deal they hike their rates up to Vanquis levels, I guess to recoup some of the money they lost on the 0% deal.

Some people can overcome this by moving the debt to another card, however there are many who are on the edge and can not get another card and are left paying extortionate interest rates.

Be very careful when taking a Virgin 0% deal. Ask yourself 'will I be able to get another card at the end of the 0% period'.

To the OP. If you can try to transfer the money to another card. If not you are stuck, you could try negotiating a lower rate but judging from posts on this forum the rate will still be in the 20's.

dhassen

MDE wrote: »

I cancelled the insurance recently on this card. You think this might be a related factor to the increase?

maybe,

Although not officially, I'm sure this does happen. Other companies have only offered good rates when you do take the PPI, awful rates if not.......

I'm no expert though, just speculation

Sheepy1209

Given the sheer number of MBNA cards out there, often hidden behind a brand such as A&L or MBNA, I think their current behaviour could contribute to tipping the balance of the economy:

House prices too high, borrowers over-extend
Some relief gained by transferring to a 0% MBNA card
Sucked into paying MBNA's interest+£5 minimum payment
Borrow more, so that even the MBNA minimum is a stretch.

MBNA then doubles the interest rate, which doubles the payment, and another household's finances go bang.

Most people do have a rough understanding of APRs, and wouldn't dream of taking out a 34.9% card!

Reducing credit limits (as Barclaycard have done) is a pain but a reasonable thing to do when risk increases. Increasing %-based minimum repayments is a pain, but with care can be worked round if interest rates stay reasonable.

But MBNA's behaviour does not encourage responsible borrowing and repayment; the only silver lining I can see is that it can trigger a light-bulb-moment.

freddy08

I agree with the above posts, MBNA/Virgin money are ruthless.

They did exactly the same to me 3 years ago just a few months after the 0% ended it went from 15.9%APR to 27.9%APR in one evil letter.

MDE

dhassen wrote: »

maybe,

Although not officially, I'm sure this does happen. Other companies have only offered good rates when you do take the PPI, awful rates if not.......

I'm no expert though, just speculation

I have made contact with them today over the phone. I mentioned the PPI, they said it was "unrelated". Not sure if I believe them.

Anyway, they told me to put my complaint in writing, so I have posted off a copy of the letter and will let you know what happens.

MDE

I received a letter this morning, usual blurb about credit refeerence agencies, them being within their terms and conditions to raise my rate etc etc.

However, paragraph 5 reads "However, as we value your custom, I have reviewed your account and I am pleased to confirm that I have reduced your contractual interest rate to 18.9% (variable)....."

Originally I was on 21.9% so this not only represents beating their rate increase, but actually getting a reduction.

So, in answer to my original question, it was worth complaining :T !

Bismarck

Congratulations...and thanks for letting us know!

Captain_Mainwaring_2

MDE wrote: »

Sorry if this seems argumentative, but how can my credit score be irrelevant? This is what companies use to assess the risk, and, as you have said, Virgin evidently percieve me to be a risk when my credit score indicates otherwise.

Yes I do have the credit available to transfer from Virgin- but it's a case of preferring to keep 2 cards with spare capacity for emergencies, rather than one card which is running at a maximum.

People with good credit pay their bills without paying interest, they don't generally make good business.

Virgin sees you as being someone to make money out of , If you had a 0% card available to you, then you would have used it !

MDE

Captain_Mainwaring wrote: »

People with good credit pay their bills without paying interest, they don't generally make good business.

Virgin sees you as being someone to make money out of , If you had a 0% card available to you, then you would have used it !

Incorrect. I have recently taken out a Barclaycard LoB card and transferred a chunk to it. Unfortunately as a new cardholder they won't give me a high enough limit to transfer it all. Similarly I have transferred an amount to my egg card as part of a 3.1% balance transfer deal. So in essence the debt on the Virgin card has reduced significantly anyway.

Can I request where you feel I have indicated I have a 0% card available? I said I have the facility to transfer the balance away from Virgin- and I have transferred a lot, partly to prove the point and partly to take advantage of various offers. I have not mentioned having a 0% card- you appear to have got this from somewhere else?

I appreciate people in the forum are trying to help, but I find Captain Mainwarings comment rather insulting- as if (s)he knows more about my financial situation and arangements than I do.:mad:

Bismarck

I'd suggest folks remember that the point of the forum is to help each other without being judgemental...

We're all there for the banks to make money out of....some they win, some they lose...we're in the same game though.