Sudden Credit Card rate Hikes... correct way of moving to another cheaper rate card

**minstrel** · 3 March 2012, 17:29

What is your long term strategy of getting your money out of the company?

Presumably you're making considerably more than the higher rate threshold, so you're going to be in the same situation even earlier next tax year.

Then you'll be paying 16.9%/26.8% to a credit company to avoid around 20% tax which you will probably have to pay at some point in the future anyway.

Why are you on a 16.9% BT credit card anyway? There are loads that offer 0% deals for around 3% initial charge.

Unless you've got a really bad credit rating you should be able to just apply for a 0% deal now and transfer it.

Second option would be to just take a Director loan to tide you over to next tax year. If it's less than £5k it should be no problem. If it's more than £5k, you need to pay interest to avoid it being treated as a BIK, but if it's this much I go back to my point about your strategy for getting the money out of company long term.

As a general rule, I'd say if you are looking to take out loans from a credit company or bank to avoid tax on higher rate dividend distributions, you've probably miscalculated the benefits somewhere and will end up financially worse off.

**northernladuk** · 3 March 2012, 22:20

Why can you not go read one of the 100's of money supermarket type websites which are designed for idiots that can't do this by themselves?

**MarillionFan** · 3 March 2012, 22:38

Originally posted by northernladuk View Post

Why can you not go read one of the 100's of money supermarket type websites which are designed for idiots that can't do this by themselves?

WHS

**wim121** · 3 March 2012, 23:14

Just do balance transfers .... then it's just 3% ...

Or get a decent new credit card like tesco, egg, virgin, etc, who all usually do cheap deals like 18 mo 0% purchases or balance transfers ...

**BolshieBastard** · 4 March 2012, 18:24

Originally posted by sbakoola View Post

Yesterday I received a letter stating that my BT Credit card will have its APR changed from 16.9% to 26.8% ( !!! WTF) as from Apr 2012 !!!!!!

I am borrowing more from credit cards as it is cheaper to live off your credit card for a few months rather than pay the higher rate of dividend tax via the limited. I am going to pay off all the outstanding debit balance on my cards. I pay on time and have no other debt so I should have a high credit rating (although who knows with these companies). I have not defaulted on repayments.

The fact is I cannot continue with a credit card that has 26.8% APR so after I pay off the outstanding balance when the new financial year arrives in April 2012, what is the best approach to getting the same credit limit amount on the card (lets say £10k) but with a lower rate of interest i.e. not 26.8%.

Is paying off the balance and then requesting a rate decrease an option or do I have to cancel the card after I pay off the debt and then re-apply for a different card hoping that I'll get one ????? I'm not familiar with the correct procedure / approach to get this done.

I'm guessing that paying off the credit card debts in Apr 2012 will increase my credit rating but how soon that will kick in, I'm not sure.

I wished I had got a temp loan from my bank instead.

Haha! You've been repriced! Your APR is going up because BT's credit card issuer (Bank of America) has looked at your account and realised it's subsidising you borrowing money. Your minimum monthly payment has likely gone up too.

Sudden Credit Card rate Hikes... correct way of moving to another cheaper rate card