Transfer your balance to A&L and we'll hike up your interest rate

An angry credit card user has expressed her outrage at the Alliance and Leicester, after she was invited to take advantage of a special balance transfer deal and then had her interest rate hiked up by 11%.

Iman Ramsey is a financial controller, and when she was contacted by MBNA – which runs the credit card service by Alliance and Leicester – she thought that the balance transfer deal that they were offering sounded quite attractive and agreed to switch.

Iman stated that she did have to ask for a slight credit increase in order to accommodate the balance transfer, and she also added that her credit rating had dropped very slightly over recent months, although she assumed that the Alliance and Leicester would have been aware of this at the time that the offer was made. She was therefore shocked to learn that after transferring her balance onto the new card her interest rate shot up from nearly 17% to nearly 28% – a rise of 11%.

She stated: 'I was astonished. I called A&L up immediately and the person on the phone said that they had made changes to thousands of accounts. It's put me in a difficult situation because I now only have a couple of weeks to try and sort this out. Otherwise I will be left paying interest that is the same as a store card. Considering the recent events in the news of late, surrounding increasing house prices, interest rates and personal debts spiralling out of control, how are our banks acting responsibly by pushing people over the financial cliff all in the name of greed?'

However, a spokesperson from the Alliance and Leicester responded by stating: 'We look at customers' accounts on a case-by-case basis. This is an individual matter and doesn't apply to other A&L cardholders.'

Tom Smith
22nd February 2007

More Information:

• Quick Balance Transfer Guide
  Balance transfers allow card holders to transfer the money they owe to their existing credit card to another, usually at a special rate of interest. The new credit card company pays off the old credit card debt and transfers it to the new card. This article will tell you how to play the game.
• The True Cost of Balance Transfers
  Balance transfers are a great way to consolidate credit card debts into one place, especially when there are many 0% deals available. However, there are hidden costs.
• Successful Stoozing: A Guide
  The introduction of 0% balance transfer deals brought a new financial practice which allowed people to use those deals to make money. The practice is known as 'stoozing' and it is closely related to credit card jumping. The difference is that successful stoozers have to be debt free, otherwise any gains made by stoozing will be lost in paying interest on credit cards.

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