Halifax CC - late payment fee and interest rate hike

[Ms_Owe-A-Lot]

Hello all

just a quick query I would like to put to the forum.
I have taken out a Halifax credit card about two years ago. They offered a good balance transfer rate so I closed two other credit cards and transferred the balances to the Halifax card.
They offered me a credit limit of £5000.- and all as well for a few months.
After about 6 months (no repayment problems whatsoever) they wrote to me and said they had reviewed my card and decided to reduce my credit limit to £3150.- which left my balance basically just under the credit limit.

I continued to pay off amounts and used the card on and off for purchases. Again with no repayment problems. I haven't cleared the card nor have I exceeded the limit and always paid due amounts.

However, a couple of months ago due to an oversight on my behalf I underpaid the minimum monthly payment by £9.- and was duly charged £12.- for the privilege. I paid the fine and made up the shortfall and continued to make correct monthly payments.

Now a couple of weeks ago I received a letter from them in the post advising me that because 'I paid my credit card late' they had a look at my credit file and other products I have with them (I don't have any incidentally) and decided to increase my interest rate by 5% which will cost me about £30.- extra per month.

I wrote to them and complained stating I find this measure punitive in nature. I only once underpaid the minimum monthly amount by £9.- and had already been fined £12.- for this oversight. To also increase the interest by 5% because of this was disproportionate to the breach on my behalf.

They wrote back and said they don't have to tell me why they increase interest rates.
I wrote back to them and told them they already did in their first letter and I was not asking why they increased the rate as they already told me that, but that I disagreed with their reasons as I found it to be punitive. I asked for a written response, as they keep on trying to call me at home when I am at work but have so far not had a reply.

Is there any mileage in taking this to the FOS if Halifax refuses to re-adjust the rate again ?

[Debt Camel]

Re: Halifax CC - late payment fee and interest rate hike

I doubt you will get anywhere with this. If you were offered a good BT rate it would have been on the basis of a very good credit record and this would also have meant a low interest rate. As a commercial decision they are entitled to change their mind about this.

However you should be able to ask them not to increase the interest if you agree not to use the card any more.

Can I suggest you set up a DD for the minimum payment amount to prevent this sort of problem in future and then you can make additional overpayments as you want.

[R0b]

Re: Halifax CC - late payment fee and interest rate hike

Doesn't the Foster-Burnell case ring similar to this?! subject to what the T&C's say.

[Ms_Owe-A-Lot]

Re: Halifax CC - late payment fee and interest rate hike

Should I google Foster-Burnell ? I haven't obviously heard of this, is that a similar case to what I have outlined above ?

[Ms_Owe-A-Lot]

Re: Halifax CC - late payment fee and interest rate hike

I doubt you will get anywhere with this. If you were offered a good BT rate it would have been on the basis of a very good credit record and this would also have meant a low interest rate. As a commercial decision they are entitled to change their mind about this.

However you should be able to ask them not to increase the interest if you agree not to use the card any more.

Can I suggest you set up a DD for the minimum payment amount to prevent this sort of problem in future and then you can make additional overpayments as you want.

My credit score hasn't changed since I took out the card, so everything is the same as it was at the beginning, apart from me underpaying £9.- on one occasion (for which I was already charged £12.-)

I can't set up direct debits so easily as my income is coming in over the month, not at a fixed date, so I need to stay in control of when a bill gets paid to avoid direct debits being returned.
And it is not that I didn't pay a monthly bill, I underpaid by £9.- (once)
So I think a £12.- charge is punishment enough for this, they don't also have to raise the interest rate by 5% on top of that, that was my thinking

[nemesis45]

Re: Halifax CC - late payment fee and interest rate hike

A creditor cannot fine you, these are charges levied in accordance with the agreement you signed.
Check your agreement on interest rate changes and the explanations on this.

nem

[Berniethebolt]

Re: Halifax CC - late payment fee and interest rate hike

I believe that if you wish to terminate the agreement you can do that where you can repay the card at it's present interest rate but not have access to the card again. I agree with others about there being no milage in going to the FOS

This is not the first case of a low interest rate being offered only to have it hiked as time goes on. [MENTION=37786]FlamingParrot[/MENTION]

[FlamingParrot]

Re: Halifax CC - late payment fee and interest rate hike

I believe that if you wish to terminate the agreement you can do that where you can repay the card at it's present interest rate but not have access to the card again. I agree with others about there being no milage in going to the FOS

This is not the first case of a low interest rate being offered only to have it hiked as time goes on. @FlamingParrot

Yes, you should have the option to pay off the balance at the previous rate but not use the card anymore. I know a few people who are doing that although when MBNA put that forward to me I just stopped paying them, full stop. :grin:

With regards to how and when they can increase the rates, one would have to look at the T&Cs.

- - - Updated - - -

Should I google Foster-Burnell ? I haven't obviously heard of this, is that a similar case to what I have outlined above ?

It relates to an overdraft, you will find it here: http://www.legalbeagles.info/judgmen...August2014.pdf

[Ms_Owe-A-Lot]

Re: Halifax CC - late payment fee and interest rate hike

Yes, you should have the option to pay off the balance at the previous rate but not use the card anymore. I know a few people who are doing that although when MBNA put that forward to me I just stopped paying them, full stop. :grin:

With regards to how and when they can increase the rates, one would have to look at the T&Cs.

- - - Updated - - -


It relates to an overdraft, you will find it here: http://www.legalbeagles.info/judgmen...August2014.pdf

I already got a new card with a different lender, but hacked off with Halifax. So good idea to just cancelling the agreement and then pay it off at £1.- a month.
OK, I take your points and will just tell them to cancel it and save the hassle with the FOS

[Berniethebolt]

Re: Halifax CC - late payment fee and interest rate hike

If you are working which I suspect you are it is not a good idea to just start paying at £1 a month. If you want to keep the old interest rate tell them what you are doing and pay the minimum amount. If you are prepared to get a default, ruin your credit history for 6 years and potentially get a cci then go ahead and pay £1 per month.

Modern credit agreements are very different from ones from before 2007

[Debt Camel]

Re: Halifax CC - late payment fee and interest rate hike

There is some general information on Halifax credit cards here http://debtcamel.co.uk/halifax-credi...interest-rate/

So good idea to just cancelling the agreement and then pay it off at £1.- a month

Only if you want to get a default on your credit file and never get offered a good balance transfer deal for 6 years. Tel them you want to cancel the agreement and stay on the old old interest rate. Then set up a standing order for the current minimum payment - this will pay the debt off much faster and pay less interest than only making the minimum payment.

[FlamingParrot]

Re: Halifax CC - late payment fee and interest rate hike

I already got a new card with a different lender, but hacked off with Halifax. So good idea to just cancelling the agreement and then pay it off at £1.- a month.
OK, I take your points and will just tell them to cancel it and save the hassle with the FOS

As others have said, the problem with that approach is that you will be defaulted and your credit file would be shot to pieces for six years, so unless you already have other defaults, it's not something I would recommend. :mmph:

[Ms_Owe-A-Lot]

Re: Halifax CC - late payment fee and interest rate hike

Yes, I am in full time work.
Apparently I have got until November to tell them what I intend to do, so will just close the thing down and pay it off.

[FlamingParrot]

Re: Halifax CC - late payment fee and interest rate hike

Yes, I am in full time work.
Apparently I have got until November to tell them what I intend to do, so will just close the thing down and pay it off.

You don't need to pay if off in one go, you can keep making your minimum payments every month which will obviously decrease as you go along since you won't be using the card.

[Ms_Owe-A-Lot]

Re: Halifax CC - late payment fee and interest rate hike

Yes, that's right.
I could probably pay it off in one go, but I think I will just do it in stages, at the current rate and then let it fade away that way