CCC Debt - What options do I have?

[audioslim]

Hi All

 

MBNA have just decided to increases my APR from 17% to 29.9% on my virgn credit card which has 11k outstnading on it.

I'm working and I'm paying it off min payments + a bit more each month (although in reality the os balance doesnt change much) but I'm finding it very hard on moral reasons to be able to accept such an increases in the APR considering the outstanding amount.

I'm an easy target for MBNA to make a quick boost in profits due to the outstanding amount.

 

Do I have any options here to fight this.

I've phoned them up and the refuse to budge, even though I've not missed payments and I do have a good to excellent credir rating.

 

I spoke to their debt recovery team who wouldnt arrange any form of agreement even though i said I cant afford to pay it and they simply said they'ld take me to court.

 

Balance transferring 11k seems to be an impossible task. I've applied for 2 credit cards, but they dont seem to want to know once they have the 11K put into the box on the forms!!.

A personal loan is also an option and will be happening unless I can really get one over on MBNA by forcing them into some form of agreement for repayment.

 

Do I have any options here?

 

Thanks

 

Slim

[rory32]

Are there any charges on the account?

 

You say you have an excellent credit rating but can't balance transfer? Have you actually been turned down for the 2 credit cards or have they just offered you lower credit limits?

[audioslim]

No charges on the account at all.

 

I've applied for 2 credit cards in the past 6 months. One was the captial one card and they refused me and sugested their other card at like 20% or whatever and the other card I tried (and I cant remember which make), online just refused me also and didnt offer any alternative.

I'm convincved it's the os balance that means they want give me the balance transfer with 0% apr.

 

Just looks like I might need to set my sights a little higher in terms of staying clear of the 0% balance transfer offers.

 

My credit rating is good to excellennt. I've (with the Mrs) applied for a remotgage in the last 6 months with Nationwide (didnt end up taking it though) and there system stated it was only 1 down from the best credit rating, and they had no problems offering a remotgage so I cant really see why I cant get the decent deals and the likes of MBNA are hiking my APR by rediculouse amounts.

The only thing I can think of that might be affecting my credit scoring is that over the past 4 months or so my direct debit for my mortgage has gone unpaid and I've had to sort it out manually (still all up to date though).

This was directly caused by Barlcays taking over my Woolwhich accounts (and sending the interest rate on the mortgage reserve all over the place) thus at the time I didnt know if I was coming or going.

There isnt anything outstanding , or even genuine 'missed payments' as it was all sorted out in time.

 

Ta

 

Slim

[rory32]

It may be because you have remortgaged in the last 6 months that the CC companies don't want your business particularly with a reasonably large balance of 11K.

 

There isnt anything outstanding , or even genuine 'missed payments' as it was all sorted out in time.

 

But does it show on your credit record as okay? I would get a copy of your credit records as different companies use different scoring mechanisms.

[audioslim]

Thanks Rory.

 

I've never actually requested by credit file so I think now is the right time.

I have in the past missed the odd payement but nothing of note so perhaps it is the remortgage that is concerning them. Something must have tirggered this.

 

Anyway back to the original question, can I simply not pay the credit card bill, and then when they start writing to me then make an arrangement with them to pay it back with interest frozen etc?

 

Slim

[rory32]

That's a dangerous game to play. Before they freeze interest (and you would need to convince them of a change in circumstances, rather than your just not willing to pay) they would issue you witha default, so you can then forget about the loan. The default will be on your credit record for 6 years so will effect you if you try to remortgage in this time i.e. you will get a sub prime rate. MBNA will probably only freeze interest for 6 months and then pass your account to a DCA who will no doubt phone you at least a few times a week wanting you to up payments. So IMO withholding payment is not a good option.

 

I'm not trying to paint a black picture but that is the reality of withholding payment. They will wreck your credit record.

[audioslim]

Thanks Rory.

 

Thought as much but it was worth knowing.

 

Arent there any rules on increasing rates, eg by 70% in my case?

 

Ta

 

Slim

[rory32]

Well yes, but 29.9% would not be seen as an extortionate credit bargain. As part of the credit agreement it probably said we will vary the interest rate from time to time. So although it's a 70% hike from the interest rate you were on it's still legally okay.

[audioslim]

Oh well worth a try I suppose although I still believe MBNA are behaving like some backstreet credit shark (lol if they arent already classed as that anyway!!)

 

Thaks for the info Rory.

 

Regards

 

Slim

[sequenci]

Have you considered switching the £11k to a personal loan? The interest rate is going to be significantly lower, you could probably get a rate of around 8-10% with a good credit history.

 

Although 29.9% is not extortionate I think you could still consider a complaint to The FOS about this hike. You will need to exhaust the internal complaints policies of MBNA first, however.

[rory32]

Sequenci

 

A personal loan is also an option and will be happening unless I can really get one over on MBNA by forcing them into some form of agreement for repayment.

 

[audioslim]

Interesting, thanks.

 

I like complaining and making these companies work a little.

 

I know 29.9 isnt the highest, but I do feel the hike is totally unaceptable.

 

I will give their internal complaints procedure a crack actually although plans are afoot to clear the debt once and for all soon

 

Silly of me to think there is a way of forcing their hand a little without causing havoc on my credit history. They are all sharks though, thats for sure

 

Thanks all.

 

Slim

[sequenci]

Sequenci

 

That teaches me to try and multitask.