virgin credit rate increase plus minimum payment increase

[gypsysaffy]

Hi my husband has a virgin credit card which is paid on time but has had a letter saying from march 2008 his rate is going up to 34.9% and then another later saying they are updated the minimum payment on his account clause 1b of the terms and conditions and the minimu payment that you must pay by the payment due date show on your statement each month will be as follows, if the blance shown on your statement is £10 or, it will be the total amount of the statement balance: or if the balance shown on your statement is more than £10 it will be whichever is the least of 5% of the statement balance or the total of any payment protection cover charges, interest, handling fees and default charges plus £5, provided it will always be at leat £10. The balance at present is 6200 and he pays 144.00 does this mean the minimum payment is going to doulble and if so is there anything i do to get this reduced. We need help, hope someone can advise us.

[2Grumpy]

whichever is the least of 5% of the statement balance or the total of any payment protection cover charges, interest, handling fees and default charges plus £5,

does this mean the minimum payment is going to doulble

Not unless the interest rate has doubled, but it would rise in line with the interest rate

 

Doesn't it say estimated interest on the statement?

[2Grumpy]

Having got to work & found my calculator, if my maths is correct that would be around £162.

 

Imagine all the disclaimers possible, add a few more and put them here

 

Assumptions made: no ppi, no other charges, previous monthly rate: 2.24% (30.5%apr), 34.9% is the new apr, (calculated to be 2.53% monthly), I didn't make any mistakes. There might be clues on your statement that give some indication of whether I am correct in my assumptions.

 

Grumpy

[gypsysaffy]

Hi thanks for that the letter says the new monthly interet rate will be 2.5292% so have i got it wrong somewhere, but they say they are putting my minimum payment up as well i must of not read it right as seeing the 5% i assumed my minimum payment would be nearly double.

[2Grumpy]

whichever is the least of 5% of the statement balance or the total of any payment protection cover charges, interest, handling fees and default charges plus £5

Interest + £5 is less than 5% of the balance, so they charge interest + £5

 

Grumpy

[tomterm8]

Hi thanks for that the letter says the new monthly interet rate will be 2.5292% so have i got it wrong somewhere, but they say they are putting my minimum payment up as well i must of not read it right as seeing the 5% i assumed my minimum payment would be nearly double.

 

The minimum payment would approximatly double.

 

Frankly, this is a rediculous amount of interest to be paying, is it possible for you to apply for a new card, do a balance transfer, and cut up the old charge?

 

What is the rest of your financial situation like?

[phatram]

Take a look here

http://www.consumeractiongroup.co.uk/forum/mbna/114133-great-mbna-virgin-interest.html

[Filthy Monkey]

That's a useful link, pahtram. Nice to know I am not alone in this! I have a card with Virgin with a £20k limit. Following a divorce a few years back, the balance has been sitting around £19k and, almost like clockwork, every September I receive a letter from them telling me that my rate will be increasing from 12.9% to 26.9%. Every year I have to go through the same process of calling them, being told by a call centre monkey that it is either due to rising costs or increased credit risk and that there is nothing they can do. Every year I ask to get put through to somebody with the authority to do something and then get passed through to their 'customer loyalty' team. Every year, the person I speak to in customer loyalty tells me that they can drop the rate to 23.9% and, every year, (can you see how tedious this is getting!?) I ask to speak to their supervisor, who then agrees to keep it at the current rate, as a gesture of goodwill!

 

This year, though, I missed the letter and was charged interest at the higher rate for a month before I noticed it when checking my online statement. I called them and went through the same process, but couldn't get them to refund the additional interest payment. However, I called back the next day and spoke to the call centre manager, a lovely Irish woman, who credited my card with £150, to make up for the inconvenience.

 

While I was grateful to her for stepping in and resolving the problem, I am still mad at them for doing this every year. I plan to pay off the card over the next few months and cut it up. It really is not the way to retain customers! Good luck sorting it out, Gypsysaffy...

[phatram]

Just remember folks you are not dealing with Abbey or Virgin or whoever, its MBNA !

Trying to make us pay for their sub-prime losses in the US of A ??

Beware MBNA,cos Brits fight back!!