Election, Hung Parliament, Political Coalition, New Prime Minister etc; all these happening in one week can make you lose track fo other things happening around you. That is exactly what the Virgin Atlantic American Express Credit Card people were counting on. They thought this will be a good time to bury bad news.
I got a letter these past weekend from Virgin Atlantic American Express credit card which informed me that beginning from June 2010 the standard interest rate is to be increased from 17.9% to 27.9% APR!!
The “reasons” they gave for the increase were:
- Changes in your circumstances or in our credit assessment of you;
- changes in the cost of administering your account;
- changes in external influences and in economic conditions; and
- changes in the legal or regulatory obligations which affect us.
The above are a load of cow-dung to me. What it all boils down to is that they feel they are not making enough money now, so they are going to squeeze you for more.
To satisfy my curiousity, i visited their website and found that the ‘Black’ version of my card is already charging 37.9% APR!!
To tell you the truth, these guys can bump up their interest rates for any excuse they can find – financial downturn or not- they don’t care. When the Bible says “the borrower is servant (or slave) to the lender” (Proverbs 22:7), it is not joking.
The financial institutions follow ‘the golden rule’ – “He who has the gold, makes the rules.”
Interest rate hikes like this are becoming common with lots of credit cards and things may get worse – so be prepared. If you need to use credit cards at all, use them only during the promotional rates period.
Fortunately for me, this is a card i use for air travel and i don’t carry balances on it. For the sake of not making any ugly mistakes and for my financial sanity, i am now going to do what i should have done long ago – close the account completely and get them out of my life.
If you have the Virgin Atlantic American Express credit card, my advise is open the mails they have sent you and pay off the balances – if you can. If not, transfer the balances to other cards with lower APRs and endevour to pay them off as quickly as possible
Has this interest rate hike affected you, let’s hear your story. Leave a comment below.
Niyi Adeoshun
Money Management Coach
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This is absolutely ridiculous!! when we are all struggling the most they kick us when we are down. I am sorry to sound so negative but its how i feel when we are getting robbed blind!!
Credit card providers got into business to make money but they seem now to have lost their souls to the extent that they don’t really care what’s going on in the world as long they make money.
On the other hand, i think it is about time consumers stopped depending on these ‘flexible friends’ and learned to live within their means.
Thanks for the comment