Raising credit card charges

[deb4tlj]

I have a credit card with Alliance and Leicester and when I took it out the interest was charged at 11.9%. I received a letter the other day stating that the interest would now be charged at 24.9%! Can they do this? I apologise if I have posted this in the wrong place.

[zootscoot]

Unfortunately yes. You will find that they have a term in the contract which allows them to vary the interest rate. It des seem a big increase though. Was there an initial discount period?

[deb4tlj]

No, there was no special offers on the account when I opened it. However, through oversight last month, I went over my credit limit by £9.00! I paid the amount over the phone by debit card and next day received a letter about the interest rate rise!

[zootscoot]

I know some of the credit card companes have started introducing stepped interest rates depending on how 'good' a customer has been. They did this around the time when OFT forced them to drop the charges to £12.

It might be worth seeking out a new card which offers good rates for balance transfers.

[oscar21]

I too have recieved a similar letter, I have had the card about 10 years, its just a simple card with no 30 day free period etc. just a low interest rate. I've had a couple of letters in the past which have stated the monthly interest rate was going up but did'nt really pay much attention to them.
I seem to remember the monthly rate was about 1.09% or similar in the past however the letter I have just recieved states a monthly rate of 2.0751% on all purchases/transfers etc. It also states an APR of 27.9%.
How can they just put up the rate as much as that. I'm sure it was about 14% APR last month. Store cards are cheaper than that.

Just phoned them whilst writing this and was told card was 12.4%, in august it went up to 24% then this month 27.9%, told them I would be paying the ballance off (£1500) in the next few minutes and the rate was immediatley dropped to 17.9%. Still not good enough though so its still getting binned. I really do feel sorry for people that dont understand this jargon, the must be getting done over left right and centre.

[deb4tlj]

Makes you sick, doesn't it? I'm adamant the raise in interest charges is some sort of penalty for going overlimit! I'm currently shopping around for a better card with no interest for a few months so I can get as much paid off as possible - in the meantime I've CCA'd A&L and I might just stick it to them for all the charges!!!!!!!!!!!!!

[oscar21]

Well I'm well under my limit, have been for a while, apart from about 3 years ago when I got a good few over limit charges of 20 odd pounds, time for a claim me thinks, they should have been happy with what I was paying in interest.