I applied for a balance transfer via Virgin (MBNA) about 12 months ago, it was a fairly sizeable transfer about 6000. At the time the APR at the end of the 0% period was something in the region of 16%, I have since been notified that this is going to now be almost doubled to 31%. Is there anything I can do and more importantly its being advertised even on this website as a good card to have, but I am worried that this is an introductory hook and then you are trapped and people should be made aware. Any advise and in view of what was on the news today about the interest rate cut being passed on to credit cards.
Any help will be great as the new 31% will cripple me and leave me with a longer standing debt. Because of the size of the balance I am finding it hard to shift the balance or split it else where despite having a good credit score.
The contract you signed up to is for a variable APR. As such they can charge what they want. You have three choices:
1 - accept the higher APR and repay accordingly
2 - ring Virgin and ask them to lower your APR
3 - transfer the balance to a 0% card such as Halifax
Of course 0% is an introductory hook. Unfortunately if you agree to a variable rate credit agreement there's nothing to stop the card provider varying it, which is what they've done.
Shop around for a better deal if they won't reduce it.
Thank you for your replies
I appreciate that its a hook but isn't this quite bad practise for such a branded company ? As stated its even being advertising on here as 16% when in fact it won't be that at the end. Its an advertising tease...If you think about it aren't most credit cards variable rate after the intro period, where would we all be if all uk banks did this overnight ? I do of course appreciate the standard obvious answers, but wondered whether any one else had experience of this and any success stories. There was an article on the bbc website today stating it is extremely bad practise and being referred to the oft ??
http://news.bbc.co.uk/1/hi/business/7749498.stm
"Typical APR" means two thirds get the advertised rate
The contract you signed up to is for a variable APR. As such they can charge what they want. You have three choices:
1 - accept the higher APR and repay accordingly
2 - ring Virgin and ask them to lower your APR
3 - transfer the balance to a 0% card such as Halifax
Correct, In some circumstances, depending on the status of the card we can look to lower the rates. All cards are reviewed on a regular basis by a automated system, which will decide based on the the circumstances of the card ( and holder through silent credit checks) what rate should be on the card.
If your not happy with the new rate, request a reduction. If you don't ask you don't get, just don't demand. Retention staff are limited by company policy and what the system will allow them to do, however being rude will get you no where. if they cant change it....well there are 2 more choices above
I find it hard to understand the number of apologists on here for MBNA/Virgin and what is quite clesrly sheer extortion.
I understand that APR's are variable, but the behaviour of this institution is clearly at the sharp end of practice. In short they are sharks.
31% APR is ridiculous, and I don't quite understand how they think they can get away with it. At least Vanquis and other cards aimed at those deemed less credit worthy don't try to hide what they are and try to hook you into a mountain of debt through what amounts to a falsehood.
I have the greatest sympathy for anyone that unwittingly gets involved with this company.
I to have been hit with interest increase on my virgin card. I did a thread asking who has received a letter? Yes it's true they can legally put up interest rates and I too understand that APR's are variable but this is sheer extortion and according to consumer watchdog unfair banking practise. Sky news has a feature on it. MBNA are planning to hike up interest rates on all cards apparently by Jan 09 but don't quote me on this.
Like you jono2375 I have had no luck in transferring to another 0% card and sorry to say, though others may have better luck than me MBNA was not interested in helping.
My only solution was to take out a loan. After believing we would only be able to get a secured loan and not get the best deal due to a few applications and one late payment I was surprised to get a unsecured loan to pay off both cards at 5.2%. Though variable I'm paying the same amount each month as I'm on my cards at present that is. The loan is only over 5 years compared to estimated 67 yrs only paying minimum payment on both cards. You get a 3mth start break and can pay off extra at any time to reduce interest and term of the loan. That's the best bit to work towards being debt free by paying a bit more of when we can.
I'm over joyed even though some might argue that this is not the best solution. One loan is paid of in 9mths the other is paid in 3 yrs and of course my recent loan in 5yrs. With the money we will save from both other loans We will be paying into this recent loan and hopefully by not getting any other credit. We will be debt free in less than 5 yrs:j Then we can concentrate on the one debt which can not possibly be paid of in the short term, our mortgage.
Signing up next week for this loan and fingers crossed it all goes to plan.
...I was surprised to get a unsecured loan to pay off both cards at 5.2%. That's an incredibly good rate. Can I ask who the lender is?
That's an incredibly good rate. Can I ask who the lender is?
Hi
I to thought this was very good. Though on a variable rate I'm sure it won't go up any time soon, as interest rates are going down.
The lender is Black Horse Finance. Apparently they reviewed their policy yesterday. The first offer a few days before was only enough to pay off one card, but now they can help clear the two.
Thank God some companies are finally helping people like me:D and not with sheer extortionate interest rates.
Hi
I to thought this was very good. Though on a variable rate I'm sure it won't go up any time soon, as interest rates are going down.
The lender is Black Horse Finance. I don't want to worry you, but since you didn't qualify your 5.2% figure as an APR are you sure you haven't misunderstood or been misinformed?
For example, is the 5.2% a flat rate? ie the APR is roughly twice that figure...around 12-13% APR?
Or have you simply divided 26% APR by 5 (years) to get your 5.2% rate?
I'm no loan expert, but taking the current credit crunch, and your less than perfect credit history, into account, frankly I'm amazed you've managed to get a 5.2% APR loan over 5 years.
Don't mean to offend...just want you to go in with eyes wide open!
I don't want to worry you, but since you didn't qualify your 5.2% figure as an APR are you sure you haven't misunderstood or been misinformed?
For example, is the 5.2% a flat rate? ie the APR is roughly twice that figure...around 12-13% APR?
Or have you simply divided 26% APR by 5 (years) to get your 5.2% rate?
I'm no loan expert, but taking the current credit crunch, and your less than perfect credit history, into account, frankly I'm amazed you've managed to get a 5.2% APR loan over 5 years.
Don't mean to offend...just want you to go in with eyes wide open!
Not offended at all, In fact thank you for pointing that out. The lady who is dealing with our application told me it's 5.2%. It will now be another thing I will be double checking before signing anything. As you said yourself I sometimes find how they work it all out a little confusing. I'm not even sure what the difference is between APR and the interest rate :o Probably why we are in this mess.
Maybe this will make more sense:-
We are borrowing 10,000 over 5 years at 280 per month Total paid back will be 16,800 if we don't make any over payments. If we do then it will of course be less.
If you are any good at calculating the APR on that please do, I'd be very interested to see what it works out at.
The only way I'm looking at it is we will be debt free in 5yrs but not paying any more a month. Which at the moment I can't see us clearing these cards within 5yrs even if we pay 140 to each a month. If that makes sense.
Please if anyone thinks I'm making a big mistake hear then let me know. I would not be offended at all. I'm just not as money savvy as some:o . Also with refusals on 0% balance transfers and only offers being secured loans at around 250 per month over 15 yrs and based on our circumstances, I thought this was the best option for us ........for now. We are learning things like maybe once our credit scores improved we can look at hopefully a better deal again in the future, if there is one!! But for some there's probably better options.
Sorry I'm waffling on a bit:rolleyes:
We are borrowing 10,000 over 5 years at 280 per month Total paid back will be 16,800 if we don't make any over payments. If we do then it will of course be less.
If you are any good at calculating the APR on that please do, I'd be very interested to see what it works out at.
I make this to be an APR of 10.93%
Not excessive but you should be able to get cheaper elsewhere.
I make this to be an APR of 10.93%According to http://www.whatsthecost.com/loan.aspx it's around 23% APR !!!!! :eek:
I think 'july73' should start a new thread in order to get some more help. Not sure where the new thread should be though?...here on credit cards, loans, or the debt-free board?
I make this to be an APR of 10.93%
Not excessive but you should be able to get cheaper elsewhere.
Thanks NickX for working out the answer to YorkshireBoy question and giving me the APR on this loan. Will see if I can get a better deal, but if all else fails, at least it's at a cheaper APR than I'm paying on my cards. Plus one had almost doubled it's APR:eek:
I was just worried that I'd fallen into the trap of ending up paying a higher APR on this loan. Thankfully I wont be:j
Yup, I too make it around 23% :( Pretty poor value, and bad of them to mislead you like that.
According to http://www.whatsthecost.com/loan.aspx it's around 23% APR !!!!! :eek:
I think 'july73' should start a new thread in order to get some more help. Not sure where the new thread should be though?...here on credit cards, loans, or the debt-free board?
OMG you are right. I will be seeking some more advice on this. I know one card has jumped up to 31% APR not sure of the other. But definitely need to be wary and have a search for a better deal. At least now we are all talking APR, so it helps me see the difference. When I was told 5.2% I now know that's not the APR. So now know to compare APR with APR. Saved the link so I can use and do some comparisons.
Many Thanks YorkshireBoy for this link and bringing up the subject in the first place. You may have just prevented me from making a costly mistake.
Hi Jono2375,
I'm in exactly the same boat. I owe 10K & was paying 185 per month. I was advised a couple of months ago that my low fixed rate was coming to an end. When I was over my limit twice (with 12 fee added on) because of so much interest I looked into it. I asked a customer service adviser what I needed to pay to keep my payment at 185 and was told 501, which will bring me below the threshold. This month my statement came and it was back over the limit again (I have not used the card for the last 2 months). I rang and asked why and someone else said that I should have paid 536. There ws yet again another 12 added on but when I explained that i'd taken advice last month and been told wrong info, they did credit it back(I just hoped that it's not classed as a default). This month I have had to pay 265 so that is nearly 800 in 2 months. I asked what percentage rate I was now paying and they told me 34%!!! I couldn't believe it. I complained at the daylight robbery and they put it down to 21%. I am still unhappy at the bad customer service. I am writing in to complain because they tell me my minimum payment is 185 but were then charging 257 interest on top so even if I don't use the card, the balance is getting much bigger each month even after i'd made a monthly payment. The FSA have a new initiative called Treating The Customer Fairly and lots of big named banks have been fined mollions for not giving the customer a ture picture or selling customers products that are not suitable for them. If you state the FSA i'm sure that they will come to some agreement!,
Cheers and good luck
MBNA up to their usual tricks, just move somewhere else.
Sorry Jono2375 I have managed to hog your thread somewhat. Hope you get the advice you need and many thanks to all who posted on here and helped me see the light.
Best of luck Jono2375
According to http://www.whatsthecost.com/loan.aspx it's around 23% APR !!!!! :eek:
Yep it is 23% or thereabouts.
Apologies for my miss-information last night, was getting late and I made a hash of the calculation.
Definitely not a good deal in today's market of low interest rates. Hope you manage to secure a better deal that meets your needs.
No worries NickX I got a few things wrong myself. I called today to find out the APR, it is 12.9%. Not fantastic, but better than 23% APR:eek: The reason is the 280 was a rough guide based on the max it would cost including PPI. We will not be taking this out due to income pretection insurane. So it looks like our repayments will be 200ish. Will check on loan calculator. Maybe it's a way of selling, by giving us a better repayment figure on the day. Which would make most sign up without question. The other thing I got wrong was the rate is fixed and this is the reason they can not give me exact figures until the day we go in and accept the loan if we are happy with it. Interest rates are dropping, so she is hoping she can get us a better APR on the day. We are not going down till next Friday.
On trying for a better rate....No joy, Much higher offers than 12.9%APR and seem to be all secured loans:( Our credit score is classed as poor according to :money: Calculations. So now thinking maybe it is in fact a very good deal in our circumstances.
We all see the quote on TV News etc
'Cheap borrowing is now over and even if you have a good credit score expect to pay a higher APR in today's financial climate' Hence why our other 2 loans at 7.1% were not consolidated into this one, only the 2 Credit Cards. Also by improving our credit score we can opt to get a better deal later on. So I have learned something thanks to this site.:D
I will post to let you know the out come but will leave it for now so the creator of this thread can hopefully get some answers to his/her problem.
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