HELP!! My interest rate has increased!?! Can they do this without informing you?!

Toilet-Duck

Hoping someone can help me!!....

I took out an MBNA card out last year with a £3000 limit when I signed the card it came with terms and conditions in that it stated:

"Balance transfers: In the first 12 months from the account opening, we will change at the rate of 0.0 PA. After that we will charge a standard rate of 15.9 APR"

I transferred £2800 off my other card anyd everything was fine but....

Today Ive checked my statement and Ive noticed that the MONTHLY rate is now:

Standard monthly rates

Balance Transfers: 2.0751%

Surely doesnt this mean that the rate has been changed and I havent been informed? I understand its varible but it seems to have gone up alot!

For me thats ALOT since its increased my interest charges from £477 A YEAR to £740!!!!


Why on earth would they do this?! Ive never missed a payment and my credit rating is good.

The only thing I did a few months back was request an increase which I was delined.

My int free ends soon and I dont want to be paying this much on interest charges!!


Can someone please help?

Thank You!

asandwhen

you have 2 options you can ask very nicely if they would concider lowering your APR or move it onto another card before the interest free period ends - MBNA are well known for this kind of tatics im affraid it wouldn't suprise me if they put your rate up again when your promotional rate finishes.

Toilet-Duck

Thats a disgrace dont they have to inform you BY LAW? It says in the terms and conditions that they will inform you within 30 days if interest rate changes?!

asandwhen

You can ask them if this was sent but they will probably say it was sent with your bill or something like that - I wouldnt go in all guns blazing as they will definately not want to help you - I would politely ask why and if there was anything they could do.

speedbird1973

A 1000 posts about MBNA interest rates.

You will have been sent a letter, and given plenty of notice.

You either didn't receive it or didn't read it. You will have been sent it though.

bethanyrayne

speedbird1973 wrote: »

A 1000 posts about MBNA interest rates.

Maybe. but nothing from MSE condemning these practices!

Clariman

It is very annoying when a lender does this.

Is the lender entitled to change the interest rate? Almost certainly "yes". In the Terms and Conditions that you signed, there would have been a clause which stated that they could vary the interest rate. Normally it would say that they have to give you something like 30 days notice of any rate change. If they have not done that, then they would have been in breech of their Ts & Cs. However, I would wager that they did inform you: either by letter or by something in your statement.

So - what do you do about it? I would call them and say that you were not aware of any rate change and ask them (politely) to tell you how and when they informed you and what notice they gave. I'd then ask them to reduce it, saying that it came entirely out of the blue and has messed up your financial planning and that you will need to look for another card to move your balance. Hopefully they will reduce the rate.

Why did they do this? Don't take it personally. It is highly unlikely to have anything to do with whether or not you have managed your acccount well. With the recent credit crunch and the subprime losses, all lenders are re-evaluating their risk and seeking to cover themselves more fully. They are putting up interest rates across the board. MBNA have a particular reputation for doing this but they are not alone.

Clariman

speedbird1973

Despite falling foul of this once and having them try and do it again. I'm not sure there's anything to condemn myself.

It's not too tricky to avoid the silly interest rate, and with an MBNA card or two, you have potentially a lot of credit and some very good offers for existing customers at your disposal.

Play them to your advantage and don't get caught out.

I get the impression high balance + min payment is a catalyst for the upgrade to ones interest rate! I have an £8k balance and am paying the min each month - For me this is a result of snowballing not lack of ability to pay. By the time my deal with them finishes I shall be in a positon to move the debt away if I don't get a good deal on my existing or empty MBNA card.

I have to say I (every pun intended) owe them a debt! They open my eyes before my debt grew out of control!

freddy08

MBNA are notorious for this kind of practice, we see it time and again in these forums.

_Andy_

bethanyrayne wrote: »

Maybe. but nothing from MSE condemning these practices!

Why should anyone 'condemn' any lender for daring to vary the interest rate when the agreement between them and the customer is that the rate is variable?

YorkshireBoy

speedbird1973 wrote: »

I get the impression high balance + min payment is a catalyst for the upgrade to ones interest rate!

You would think so, but I've had an MBNA run card for well over 3 years now and I've had a constant stream of 0%/0.9% offers on there and ONLY EVER paid the minimum payment...£5 per month!!

From the end of my intro period (two-and-a-half years ago), my purchases rate has been 10.9% APR, although I've never actually made a purchase on the card.

I think it's something else that's triggering the increase in APR. Maybe the result of information from the CRA's? I recall reading that, in addition to the standard recorded and unrecorded enquiries, information may be given to the lenders without it showing on your credit file.

Having said that, I have massive (stoozing, so it's OK ) credit card debt (in relation to my salary) and I've yet to see my rates increased, so maybe there's another 'trigger' involved. If so, I'm not sure what it is?

Clariman wrote:

Normally it would say that they have to give you something like 30 days notice of any rate change.

Depends on the reason for the change, ie is it personal to you or across the board, and what the determining factors are. They can give as little as 7 days notice in certain circumstances.

I believe some (most/all?) CCA's have a clause whereby if you're unhappy with the new rate you can serve them notice that you want to close your account and if you do so the old rate is applicable for the notice period (sometimes as much as 60 days).