Credit card interest rates

I got a letter from my credit card provider about a week ago. Figuring its just a statement, and I've got an excellent credit rating, am way under my credit limit, pay on time every month by direct debit etc, there's no need to give it too much thought. So it remained unopened until tonight.

I decided I ought to have a look, and guess what. Its not a statement. Its a letter telling me that my interest rate is going up from 15.9% to, wait for it... 24.9%

The thieving 'B' words. Base rates are still at 0.5% and we're told they will be for the foreseeable future, so how can they nearly double the interest rate on a whim?

Its because they can.

But here's the twist. It says in the letter that I can reject the rise and keep my existing interest rate, provided that I tell them that's what I want to do before 22nd December. If I do that then I wont be able to use my credit card any more. I'll just have to continue paying as normal until its paid off, when they'll then close the account. What a shame.

Or to put it another way. Oh dear, what a pity, never mind.

 

Credit card companies are absolute thieves! All those great sounding offers for "new" customers and most folk are paying around 20% plus! I was paying 29% on mine after 14 years with the same card and I was also concerned they were going to slap on an annual charge for good measure so mine has been cancelled. I hope never to have one again.

 

Be careful about returning anything from credit card companies with something rude writted on it or you might get this happen to you
Halifax bank sends out credit card with abusive name on

 

I wouldn't normally bother with a credit card even when travelling abroad, but when (back in 2002) I decided to spend 5 weeks in the States with Mr. F'smum, my bank 'advised' that it would be a good idea to have one. I couldn't really see the point but, nevertheless, signed on the dotted line, stuck the thing in my wallet and practically forgot about it, except the statement would come on 9th of each month telling me I owed them nothing.

Then there was the year when my youngest daughter's 21st birthday, Christmas and the central heating boiler blew up, all in the same week so I used the credit card, transferred funds to my current account when the banks re-opened and waited for the January statement - which turned up saying I owed them nothing (). Come February and not only do I owe them for the items I'd bought, but they'd had the *|#^ing cheek to add on interest since they hadn't received the 'minimum amount' due in January. The ensuing conversation contained a 'full and frank exchange of views' and the interest was removed.

Fast forward to April 2011 and receipt of the letter from the credit card company informing me that unless I use my card '... on a regular basis, the facility will be withdrawn...' - in effect, I don't use it often enough, it costs them money to tell me I don't owe anything and they're going to cancel it.

I don't, it does and they have. :yess:

 

I buy virtually everything using my Tesco credit card which gives me 0.5 clubcard points/£1 spent - this is wherever it's used - and pay it off in full every month. That may not seem like much, but gets me nearly £100 worth of vouchers p.a. which I exchange for very small amounts of deals online when they're about to expire so I get the vast majority credited back, enabling me to save up long enough to get things like my weeks canal boat holiday in Wales during August this year completely paid for with deals vouchers.

 

But when I use that card to pay my electrcity bill, council tax, etc. I pay just the same rate as everyone else, but I get something extra and others don't, so they're the ones losing out, not me. Just the same as credit cards with cashback - those who use them get cashback and those who don't pay full price.

The only people who are paying for this are those who don't pay off their balance each month in their interest charges.

 

The only reason I have a credit card is because years ago, when I was young and daft, I was offered money on tap. Being young and daft I got into the habit of living beyond my means, and so clocked up a bit of credit card debt.

I haven't used my credit card for at least a year now, and have no intention of doing so. Its just gathering dust while the bank slowly pays it off from my current account.

On another note, I cleared all my balances with HSBC a few months ago. Paid them off in full which seemed to annoy them. Then about 3 months pass, and lo and behold, I've been stung £25 for apparently being overdrawn, even though I'd zeroed all my accounts with them and asked them to close it all down.

 

I keep a credit card for certain purchases.

Is it true you get somekind of come back regarding dodgy deals??

I always use it online, never my debit card.

And I always pay the bill in full from a DD via my current account every month.
If I cant afford it, I dont buy it. simple.

My beef is with building societies interest rates, you open a new account and within the year the interest has dropped to almost zero.

You then have to spend the best part of a day to get the idiots to change the account over to a new one, that will in 12 months be paying zero interest yet again.

 

I know thats the point, should we have to change accounts every year, I never used to.
Another sign of rip off Britain

 

Is it true you get somekind of come back regarding dodgy deals??

Under Section 75 of the 1974 Consumer Credit Act, card issuers and retailers take joint responsibility for purchases valued between £100 and £30,000. If goods/services turn out to be faulty or you do not receive them because the company goes 'bust', you can claim a refund from the card provider.

I always use it online, never my debit card.

Please don't (unless it's something you specifically want and there's no alternative) - always use your debit card.

Debit cards usually have a limit - I think mine's around £250 - and although most stores will allow you to go over that, (I have paid the deposit on a new car with my debit card that was well in excess of £250), you will usually find that the bank ask to speak to you before authorising payment.

With a credit card, although you may have a limit, please bear in mind that that is a 'spending' limit - i.e. that amount can be spent, not on items per se, but as deposits. Think about it, if your credit card - with a limit of say £5,000 - is misued, someone could make 10 deposits of £500 each, leaving you potentially, with debts of £50,000 or more.

OK, so eventually you'll be able to sort out the mess - but really, it's much better to prevent the situation before it arises.