Your rights when paying by credit card APR increase sample letters

If your credit card provider puts up the interest rate on your card and you don't agree with their move, use these sample letters to challenge the increase.

Full-payers and usual-payers

Use this letter if you always clear your credit card balance in full or pay off more than the minimum payment each month.

(Today's date)
(Your home address)

Name of your credit card company
Address of credit card company

Re: Increased APR on account number (Insert your credit card account number)

Dear Sir/Madam,

I refer to the increased interest rate (APR) applied to my credit card account by (Insert the name of your credit card company) rising from (Insert your previous interest rate) to (Insert your new interest rate).

I believe that this increase does not constitute fair treatment of me as your customer. As you will be aware, I have not missed any payments and have therefore not breached the terms of my credit card agreement. In fact I have always, or nearly always paid off my balance in full each month.

The rate increase penalises me for keeping within the terms of my agreement. Please therefore provide evidence explaining how my individual credit risk has changed to justify the increase in interest rate.

If you are unable to provide this evidence, please return the interest rate (APR) on the credit card to the rate it was before the increase and refund any extra interest that has already been charged at the higher rate.

I look forward to receiving your response within a maximum of eight weeks of the date of this letter or I will issue proceedings with the Financial Ombudsman Service to pursue the matter further.

I am happy for you to contact me on (Insert your telephone number) to discuss the matter.

Yours faithfully

(Sign your name)
(Type your name)

If you rarely pay off your bill in full or are struggling with your credit card debt

Under rules agreed with the credit card industry, if your credit card provider puts up your interest rate you have the right to reject the increase and 'freeze' your account. This means that you'll be able to pay back the amount you owe at your old interest rate over a reasonable period. You won't be able to use the card for new purchases or cash withdrawals though.

Use this letter if you're struggling with your credit card balance and have seen your interest rate (APR) increased by your credit card provider. You may wish to adapt the letters depending on whether you have missed payments or have been making the minimum payment each month.