why is regulation so bad?

[SXGuy]

I am really stumped to why regulation regarding extreemly high interest rates has not been addressed.

Cards which were taken out years ago with ex 15% APR, have over the years increased to nearly 40%.

If people knew back then, that the interest rate would increase to that much, im sure a lot of us would have not continued with the application.

With all the stuff going on right now about curbing the banksters it seems credit card companies have been left alone to make their own rules.

It baffles me as to why no one has addressed the issue that these kind of interest charge increases is unfair.

As an example my mother had an egg card with around 9k of debt, she was paying 200 to 300 pounds a month back, and after 4 years, had only cleared 4k of it.

If my maths are correct, she would have paid the full balance of and then some by then, but the continuing increase in interest charge rates ment she was never going to pay it off.

[Never-In-Doubt]

Re: why is regulation so bad?

They do know about this, and have provision in place for it.

Basically if your card etc gets a rate jack you are free to decline it which then puts your account into repayment only mode, at the last APR prior to your refusal to accept the increase in terms.

Put simply, assume you have a barclaycard at 8.9% and they rate-jack this to 35% - instead of having to worry about paying the full account off before the increase, you simply refuse the rate increase and they will cancel the account but allow you repayment terms assuming the old rate of 8.9% until balance is cleared in full.

Quite an easy opt-out for the consumer in all fairness.

[mk_chatham]

Re: why is regulation so bad?

There probably was PPI on top of the interest. Stopped paying 2 years ago and have never heard from Egg other than a generic email in April last year saying it had been sold to Barcraps and I should “continue making payments as usual”, which I did -was paying £0/mth and continued paying £0/mth!

On paper I still ‘owe’ them but in reality they probably OWE ME after 5 years of paying around £100/mth so I’m just keeping my fingers crossed and counting down to 2016… no-one can say they didn’t ask for it!

Hi FP

What's the plan then, wait until its SB then put in a PPI claim

I know they would normally credit the account with any mis-sold PPI, but if the debt is SB maybe the PPI would come to you

They will probably still be dealing with the PPI back log till then anyway, now where is Di ...........



MK

[SXGuy]

Re: why is regulation so bad?

its true, you could refuse the rate, but like you said, the account is then cancelled and you repay the debt at the rate before refusal, thats fine, and you could also take out a loan at a fixed rate to repay that debt, but the point is, a credit card was a tool used to borrow money, repay it, and borrow again, with a loan or closed account, all you can do is repay that debt, with no way of using it again should you need to.

So for some people, the advantage of being able to dip back into the balance after a repayment outweighed the ability to refuse the increase and pay at the old rate.

They also know this which is why they do it.

[Never-In-Doubt]

Re: why is regulation so bad?

As I said in the linky provided, I would never suggest applying for any reclaim once the debt becomes SB'd - at that point you forget it. If you genuinely think you have a title to some refunds, and know it will adequately clear the balance, then fine go for it - otherwise no, not my suggested course of action.

Yes, doing a reclaim for funds YOU paid into the account, would bring it out of SB if under 6yrs, if after the 6yr SB date, they would refund it to the debt balance, so it just aint worth it.

The exception to this is if the OC has fully assigned the rights to a new DCA, you can then reclaim as they are not allowed to then pay the reclaim to the DCA but instead, pay it to you.

With Batman, I got the original debt wiped in full via the DCA and then went to the OC and did the reclaim, they (OC) then sent the reclaim direct to batman and he then made a rather large donation for the cheek of it (I think) - but point is, that's how to beat the system.....