Credit cards - Change in interest rates
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If your credit card company is going to change the interest rate charged they must give you 30 days notice under their lending code. They must also tell you when the changes have come into effect.
You have up to 60 days from being informed to cancel your agreement. Once you cancel you will have to pay off with interest at the previous interest rate.
These rules do not cover an end of a promotional period or if you have a product that tracks Bank of England interest rates.
You should know
- Never send your credit card number by email, Resolver will remove your credit card number from any outgoing email for your protection.
- You can submit your issue through Resolver but your credit card company but they may contact you outside of Resolver to confirm your details.
- If you cannot resolve your issue then Resolver will remind you in eight weeks that you can escalate your case to the Financial Ombudsman Service for a free independent assessment.
- Under Section 75 of the Consumer Credit Act, if you have an issue with a firm that has delivered goods or services, then the credit card company is jointly liable.
Credit cards are covered by a Code of Conduct set up by the industry, the Financial Ombudsman Service and the Financial Conduct Authority. The finance industry works on the principle of being fair and reasonable in the way you are treated. So for example”
- Details of your interest rate, charges and outstanding should be clearly marked on your statements
- If you have a promotional rate then the credit card firm will remind you 8 and 4 weeks before it comes to an end
- Your credit card bill will show you an estimate of your interest for the following month
- Every year you will receive a summary of the previous year’s use, and credit charges
- If you are only paying the minimum amount, then your credit card company should contact you to ensure you understand there are better ways to pay
Struggling to pay
If you are struggling to pay your credit card bill, you should contact the credit card firm as there are a number of ways they can assist. In addition, you should contact organisations that are there to help consumers where things go wrong such as Citizens Advice or the National Debtline.
If you have lost or had your card stolen, you should report the issue to your credit card company immediately. If it was stolen, you should also seriously consider reporting your case to the police and to get a crime reference number.
If you believe you are experiencing fraud, then you need to identify the transactions that you consider to be incorrect and contact the credit card firm immediately. They will investigate the issue for you.
As long as you were not negligent in the way you handled the card or reported the issue, then you will not have to pay for any inappropriate transactions.
The worst case scenario is the first £50 of any liabilities (goods or services purchased fraudulently through the card), although this is rarely enforced in reality.
Section 75 of the Consumer Credit Act
If you have an issue with a good or service and cannot resolve it, then under Section 75 of the Consumer Credit Act your credit card firm is jointly liable for any issues. This means if you cannot resolve an issue with the firm you can raise your case with the credit card provider and they are liable to refund you.
This covers situations such as you have been miss-sold, product is faulty, not as described, company has ceased trading. The value of the transaction must be between £100 and £30,000 even if you have only done a part payment on credit card.
If you have an unresolved issue with a credit card company then you have the right to take your case to the Financial Ombudsman Service after 8 weeks or if the company issues a deadlock letter. The Ombudsman is there to provide an independent assessment of the issue and can make a decision that is binding on the company.
Payment Services Directive 2
The new Payment Services Directive is a piece of legislation that tightens the rules around the sending and receiving of money by payment service providers (PSPs).
A PSP is a business like a bank or money transfer company that provides the following services:
- Cash deposits and withdrawals;
- A payment from one person to another (personal or business);
- Regular payments, like standing orders or direct debits;
- Plastic card transactions;
- Money transfer; and
- Electronic payments, like online, telephone or third-party payments.
The payment services directive doesn’t include things like:
- Cash-only transactions (handing over money for goods);
- Cheques and drafts; and
The new rules are called the Second Payment Services Directive 2 (PSD2) and started from 13 January 2018.
From Saturday 13th January, the businesses affected by the Payment Services Directive (banks, money transfer companies, and, crucially, card payment services) will no longer be allowed to apply additional charges for card payments.
Service charges and administration fees that apply to all types of payment are still allowed, however.
If you find that a company is charging you extra to pay via credit card, you should use Resolver to make a complaint.
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