recent CCA request due to 35% interest rate

[maxiblackie]

Hi,
I have been paying 35% interest on my credit card since july 09. I did request a reduction on the interest rate at the time by phone, but i was told NO.
I was not aware of the self help forum, so just got on with paying. It is now getting too much, as my balance is not reducing, even though i have paid them nearly £2000 in the last 6 months, in fact my bill is rising!!

So have been struggling to pay my bills, so for £1, I recently sent off my CCA request.
This is what i got back, is it what i need to ask them to reduce my rate?
As i am in desperate need for some advice now.
Thanks
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[Tools]

Re: recent CCA request due to 35% interest rate

Hi Maxie,

Can you tell me what date you originally signed the contract.

Also, if the agreement does turn out to be enforceable, you would need to ask them to deal with you sympathetically by explaining you are unable to repay at the current amount.

What was the interest rate when you took out the card and if it was a promotional rate, what did it revert to once this had expired.

What is the current situation with your credit rating, good or bad?

[maxiblackie]

Re: recent CCA request due to 35% interest rate

hi, 2003 was original contract.
Had initial 0% for 9 months, and over the last few years it has risen to 35%. Not used card regularly, but used it last year 2008/2009 and got increased to 35%.
NO missed payments.
Checked credit rating-poor.
Possibly as i have a number of cards with available balance on them, albeit small.
And i applied for a loan twice, and both times rejected. So not able to do much with my credit rate being poor.

[Amethyst]

Re: recent CCA request due to 35% interest rate

· If, after the first year of operation, a subscriber decides to reprice a customer’s credit card it should undertake the following procedures prior to any increase:
Give the customer at least 30 days advance notice of the increase in the interest rate;
Give the customer options which include closing the credit card account and repaying the balance at the existing interest rate, within a reasonable period;
Explain, if asked by the customer, why the interest rate is being increased; and
Consider offering an alternative product (if there is one available) at an equivalent or lower rate of interest.
· Subscribers should not increase the interest rate on a credit card if the personal customer:
has failed to make two or more consecutive minimum monthly repayments;
has agreed a repayment plan for the account; or
is engaging with a not-for-profit debt agency to discuss a repayment plan and the issuer has been formally notified.



Have a read -
Themed review of compliance with the Lending Code's provision on risk based credit card re-pricing

In January 2010 the LSB completed a review of compliance by Lending Code subscribers with the Lending Code's provisions on risk based credit card repricing.

Click here to view report





You can use that to aid in your request to get the interest back to before they whacked it up.

[maxiblackie]

Re: recent CCA request due to 35% interest rate

Thankyou for that document.
I got my first letter indicating a change in my interest rate to 35%, and i had the option of closing it and paying at the original rate, which during the phonecall it was already at 34.9%. So the previous increases had not been obvious, and due to having a lot on my plate, i must have missed the previous increase.
I'm not really sure what to do,see if there are any solutions.
Thanks

[Amethyst]

Re: recent CCA request due to 35% interest rate

Okay - do you have your statements etc from your account so you can track how the interest rate was pushed up ?

Do you consider yourself in financial hardship or is it simply the fact that you are paying and paying and getting nowhere because of the high interest rate ?

[maxiblackie]

Re: recent CCA request due to 35% interest rate

I have all my statements, so i can track back through them to find out when and by how much the interest rates were raised.

I have been managing with help from my family, so now i would say that i'm in financial hardship.

[Amethyst]

Re: recent CCA request due to 35% interest rate

Hi, Okay you can try asking them to shut the card down completely and enter a repayment plan situation - this will impact your credit rating more. The will probably reply no to this in which case you can go back asking for the original % rate but you may as well start from 0. See if you can reword to suit your own circumstances a bit more.



Dear Sir/Mr

Re: Your Account Number: xxxxxxxxxxxx

I wish discuss with you the repayment of my credit card debt. I am finding it increasingly difficult to maintain the present level of repayments. Since taking out the card and the end of the initial promotional rate period you have increased my rate to become completely unmanageable. My minimum payments now serve only to pay your interest and the balance is not reducing.

Please find enclosed an Income and Expenditure sheet which details my current position. As is clearly shown, the total amount available for us to repay my creditors has now become significantly reduced.

In view of our circumstances, I am writing to all my creditors to ask that they agree to accept reduced monthly payments and that any interest and charges currently being applied to the account be frozen to enable the debt to be repaid as quickly as possible.

To this end, we request that you agree to installments of of £............ per month. I have no intention of any further spending on this credit card and to this end have destroyed the card, parts of which you will find enclosed. (dont put the whole thing in or its a security risk)

We would like to assure you that it was never my intention to renege on our financial responsibilities and as such, should my circumstances improve, I will contact you immediately with a revised installment offer.

Thank you for your assistance. We look forward to hearing from you as soon as possible.

Yours

Maxi

[maxiblackie]

Re: recent CCA request due to 35% interest rate

Thanks, I will go through my statements over the last year to see when the interst rates were increased.
And then i will get the letter organised. It will take me a few days to put all my information together.
I will let you know when i get it together.
Thanks
maxiblackie

[maxiblackie]

Re: recent CCA request due to 35% interest rate

hi,
My interest rate was increased in july and then again in october.
Would this make any difference?
Thanks
maxiblackie

[Amethyst]

Re: recent CCA request due to 35% interest rate

Capital One customers face rate hike - Times Online

Might be of interest

[maxiblackie]

Re: recent CCA request due to 35% interest rate

Dear .......,

Thankyou for complying with my CCA request.
I have 2 complaints relating to the above account:

i) Interst rate increased without option of closing my account and keeping original rate.
ii) Interst rate increased twice within a 6 month period.

I will complain to the Financial Ombudsman and the Office of Fair Traiding if my complaint is not dealt with.

Thanking you
Maxi blackie

[maxiblackie]

Re: recent CCA request due to 35% interest rate

would a letter something like this be a practical way forward?
thanks

[Amethyst]

Re: recent CCA request due to 35% interest rate

Yes, sorry I read earlier and Tools and I commented it was perfect lol but forgot to post on your thread oops - I think that is all you need to get the complaint registered and some kind of response back to see where the lie of the land is.

[maxiblackie]

Re: recent CCA request due to 35% interest rate

thanks
will get it sent in the next few days.
maxiblackie