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Jenny54321

MBNA Huge Interest Rate Rise

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I received a letter this morning with a rate rise on my MBNA credit card to 34.9%. There's nothing I can do about this, I'm up to my limit, my credit is not good enough for a balance transfer so on the debt of £7400 I'll be paying £215 a month in interest alone before I start paying down the debt.

 

As I say there's nothing I can do about this, I'll either have to find a way to pay it or get my first ever default or just ignore it and see what they do (joking :)).

 

It's a worry but my question is - how are the credit card companies allowed to do this? I know their answer is because they see you as a higher risk but by putting up interest rates you are more likely to not be able to pay the debt and default thereby becoming a higher risk, whereas with the lower interest rates you could pay it back just fine.

 

Is there no regulation or watchdog that oversees this? I can't do anything about my situation but in the longer term I would like to add my voice or start a group to make the authorities or MP's aware of what is going on and why so many people are getting into trouble with debt. It may help some other people in the long term.

 

I have looked up other people's situations with the MBNA group of companies and it seems (in my opinion) they have various underhand tricks to trap you into extortionate interest rates if you are not careful, there seem to be many people in this situation. There are limits to interest rates in the US, why can't they do that here, for instance?

 

Thoughts please

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Hi Jenny

 

We seem to be hearing this more and more at the moment. I don't think you should necessarily just accept this situation, and would suggest a few things you might like to try.

 

1. Phone and see if you can negotiate a better interest rate.

 

2. Check if you're paying PPI, and if so, if you signed up for it.

 

3. Send a CCA request with £1 to check that there is a properly regulated credit agreement.


 

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Advice & opinions given by Caro are personal, are not endorsed by Consumer Action Group or Bank Action Group, and are offered informally, without prejudice & without liability. Your decisions and actions are your own, and should you be in any doubt, you are advised to seek the opinion of a qualified professional.

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After you've followed Caro's recommendations it might be worth checking whether MBNA offer an opt out where you lock into your current rate but you can't have any more credit? So basically you pay the account off at the old rate.

 

If you are up to your limit, and your investigations on Caro's advice don't come to fruition this might be worth thinking about.

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you're lucky

they did this to the oh's a/c 3mts ago.

 

don't take it as anything pers, just a sign of the times.

 

dx


please don't hit Quote...just type we know what we said earlier..

 

if everyone stopped blindly paying DCA's tomorrow

the biggest financial industry in the UK, DCA;s would collapse overnight.

 

 

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