What can be done about this case please.My hubby has a big balance at a 0% deal on a cc which is due to expire at the end of this month.His rate before the 0% deal was about 8.9% and it was meant to revert to his standard rate at the end of the 12 month 0% period.
He has been paying 150 to it each month to get the balance down even though the minimum payment asked for was tiny,about 50 I think.
He phoned them to get the 0% extended or a low fixed rate and was shocked to hear that his rate apparantly after a recent credit review was to go up to just over 29%!!!
Well today I used the quidco 7 cashback deal to get his credit report from experian and it is very good.Score is 922 out of a maximum 999 and this puts him in the top 12% of the population as far as good credit scores go.
So how can the cc company use his apparantly bad credit standing as an excuse for robbery?His new minimum monthly payment after Dec is to be over 200!!!150+ of that pure interest.
Advise please.
sorry to be the bearer of bad tidings here.
the score is pretty meaningless....the record itself isn't bad as such...they just feel they can charge what they like and if you can't pay up or move the balance away, they'll have you....it's cases like this that make it worth their while offerign the 0% deal in th first place.
he could have had a 999 score and it would have made little difference.
Hi,
I've just read here: http://www.credit-card-comparison-online.co.uk/news/credit-card-customers-fight-interest-charges.html - about how many people are now phoning up their credit card providers if their interest rate is increased and because the credit card companies have "no good reason" and because the base rate is now at 3% - have been able to get the credit card company to put the rate back down to what it was before.
Even the Financial Ombudsman Service is supporting people doing this. I guess it may be quite a big step to do, but apparently if a credit card company cannot prove good reason for increasing a rate or reducing a limit they can be forced to go back to offering the original deal (and maybe even to pay compensation).
The thing to remember is that credit card companies will look to make as much profit as possible.
When there's no balance on an account interest rates will be lowered to try and pursuade you to use that card. When there's a balance, particularly when a low interest rate offer is due to expire soon, then it's not uncommon for the interest rate to be increased.
It seems to happen quite often with MBNA/Virgin going by the number of posts on these forums at times.
In addition to the article linked to by dylanuk there's also this one from the Mail on Sunday I came across when searching:
http://www.mailonsunday.co.uk/money/article-1087193/Borrowers-fight-credit-card-company-rate-hikes.html
That credit card comparison website talks about the base rate etc but that makes absolutely no difference to how credit card interest rates are calculated.
I'm actually quite surprised that people really have had their interest rates lowered by going to the ombudsman. Credit card interest rates are, after all, variable.
The quote attributed to a 'spokesman' about wanting to see an individual risk assessment of the customer is interesting. I was under the impression that financial institutions were under no obligation whatsoever to disclose such information to anybody because of it being such sensitive and confidential business information, maybe the FOS have some sort of special access to this information.
I've always been under the impression that the FOS didn't look into complaints about interest rate changes, unless there were specific complaints relating to how the change was implemented, like not being given proper notification (timescales etc).
To the OP - you may have more look if you go through to the retentions department of the credit card company. Tell them you'll be transfering the balance away from the card and you want to close it, you may have the rate reduced that way depending on the company.
Thanks for that info.Hubbys credit rating is actually exactly the same as it was 12 months ago or more,no late payments at all,most accounts settled in full.
The problem I think is that he has closed accounts on a couple of cards he had very big unused limits on as he didnt want to be tempted to use that credit again,now the cc company can see from his credit report that he does not have enough existing credit available immediately to shift the balance away from them and they are obviously hoping he cant get that credit.He can shift 80% of it staight away between 2 of my unused cards though so hopefully if he calls them up telling them he wants a settlement balance they will give him a better rate at the last moment.
Just wanted to add that this problem is indeed with one of the usual suspects mentioned in the above post.
He can shift 80% of it staight away between 2 of my unused cards though so hopefully if he calls them up telling them he wants a settlement balance they will give him a better rate at the last moment.
Settlement balance ? Surely with a month to go at 0% then the balance will be the current balance ?
Also found it strange for him to phone up asking them to extend 0% - is the CC company a charity or a financial institution ?
Settlement balance ? Surely with a month to go at 0% then the balance will be the current balance ?
Also found it strange for him to phone up asking them to extend 0% - is the CC company a charity or a financial institution ?
In the past things like that did happen occasionally. It was only very occasionally though. Nowadays there's almost a zero percent chance it'll happen.
When the OP talks about a 'settlement balance' they presumably mean speaking to the retentions department like I suggested.
Paying off the 80% without telling them would still mean that the high rate of interest would be charged on the remaining 20%. By speaking to them first there's a chance they could get the interest rate lowered before transfering away the 80% and getting the new lower rate charged on the remaining 20%.
