Halifax Extortionate Interest Charges - Advice Sought

[alimehmet]

Hi all

 

Been a while, hope you are all well and fighting the good causes.

 

Need some advice from members here on what to do about a situation that has been ongoing for my wife and her Halifax Credit Card. My wife has had her card for a little while now, she started off on zero % interest for a period of time, during which she made each month regular minimum payments, via direct debit, after the period of 0% interest, it went up to just above 15% as per her agreement, again direct debits each month, minimum payments. However what Halifax decided to do was, they increased her interest rates from 15% to 29%, they cited that she was a high risk customer hence why her interest has gone up. She has still and always paid each month the minimum, which Halifax adjusts and takes on direct debit. It is recently that the minimum they have been taking is never enough as because of the interest, it keeps her above her limit.

 

The advice I seek is, does this not fall under the UCCTA, as they are penalising my wife unfairly, even though she has been making monthly payments and they are unfairly charging her high interest. She spoke with Halifax and even the person in Customer Services said her interest rate was extortionate.

 

thanks in advance guys/girls

[Dotty50]

HI Ali,

 

You will find that there are plenty of Caggers that this has happened to but it has backfired in many cases because a lot have stopped payment due to this.

 

MBNA is another, they increased their rate to 34.9%!

 

No point in speaking to them they are a waste of time!

[alimehmet]

Hi Dotty

 

It backfired on the Caggers or Halifax? Is there a course of action that we can take to deal with this issue?

 

thanks

[Dotty50]

Backfired on the creditors.

 

When I questioned it with Halifax they just said it was justifiable due to the current economical climate etc!

 

What you do is entirely your decision, it is unlikely that you will get them to reduce the rate. In the early days, they did agree to reduce mine for 12months but wouldn't confirm it in writing and without written confirmation I would not pay.

 

Spent months playing letter tennis so they passed it onto Robinsons way.

 

If you withhold payment then they will trash your credit file so depends if you want to risk this!

[ukaviator]

I have seen letters from the Halifax stating that you can stay on your old rate of interest until the account has been paid in full, then they will close the account. Did your wife get that choice?

 

Any overlmit fees / late payment charges on the account?

[Trustdeeds]

I had a similar letter informing me of the interest rate hike. I phoned them yesterday and informed them that I would take the option of closing the account and continue making payments at the old interest rate as they are required to by recent laws. However, I was told they would leave the interest rate at the old rate if I didn't close the account. They said this would probably be reviewed in 6 months. Seems like they are keen for people not to close accounts.

[Dotty50]

Beware, they tell you anything over the phone, really helpful and friendly staff telling you exactly what you want to hear, keep a beady eye on your statements.

[alimehmet]

I had a similar letter informing me of the interest rate hike. I phoned them yesterday and informed them that I would take the option of closing the account and continue making payments at the old interest rate as they are required to by recent laws. However, I was told they would leave the interest rate at the old rate if I didn't close the account. They said this would probably be reviewed in 6 months. Seems like they are keen for people not to close accounts.

 

interesting reaction there from Halifax - when did your interest rates hike start?

 

Also you state recent laws, I havent been on this site for a little while, can you show me a link to this law?

[alimehmet]

I have seen letters from the Halifax stating that you can stay on your old rate of interest until the account has been paid in full, then they will close the account. Did your wife get that choice?

 

Any overlmit fees / late payment charges on the account?

 

No she didnt get that choice, and she had a couple of overlimit fees, that was because they didnt take enough on the minimum amount.

[Trustdeeds]

Link - one of many

5 Ways to Respond to a Credit Card Interest Rate Increase

 

The interest increase was notified to me by letter in June that my increase in interest would start August 6th. The reason was the usual that increase in risk in the current financial climate. I had until that date to inform them if I wanted to take up the option of closing the account. The increase on my £6100 balance was going to increase interest charge by £18 per month. I have closed a Barclaycard account when they increased the rate in a similar way. That was about 6 months ago and no option of not increasing the rate and not closing my account was given.

 

The person from Haliax credit card I spoke to yesterday said that she had cancelled the interest rate increase as soon as I mentioned I was closing the card because of the interest rate hike. Just seems to me that this is a change in tact by Halifax with maybe the closure option with interest rates being frozen being a preferred option by many.

[alimehmet]

I guess there is also a question that an interest rate hike is considered Unfair, so is there a route via to getting it reduced citing the UTCC Act?

[Trustdeeds]

Just a note to say that closing your credit card account and continuing to pay off at minimum payment or more (at the interest rate before the increase) does not affect any credit rating. It shows a up as normal on credit companies providing you continue to make minimum payments on time.