When you are trying to rebuild your finances after years of debt problems, one of the most important things you can do is monitor how lenders treat you. Sometimes that means challenging decisions that simply do not make sense.
Unfortunately, that is exactly what happened with my Onmo credit card, which ultimately led me to submit an affordability complaint and escalate the matter to the Financial Ombudsman Service.
This post explains what happened, why I complained, and why I believe the lending and subsequent interest rate increase were not fair.
Opening the Onmo Account
I opened my Onmo credit card in August 2025. The card was offered with an APR of around 34%, which is already relatively high but fairly typical for sub-prime credit cards aimed at people rebuilding their credit.
At the time I accepted the card, I was managing several debts and was in a much more controlled position financially than I had been in the past. My goal with the account was simple:
- Maintain a small balance
- Make payments on time
- Gradually rebuild my credit profile
This is the typical path many people in debt recovery take.
However, things quickly became problematic.
The Sudden APR Increase
Not long after opening the account, I was notified that my interest rate was being reviewed.
The result of that review?
My APR was increased from around 34% to nearly 54%.
That is not a small adjustment. It is an increase of around 20 percentage points, which massively increases the cost of borrowing.
For anyone carrying a balance, this kind of change can dramatically alter whether a debt is realistically repayable.
What concerned me most was that this increase appeared to happen without any meaningful reassessment of my financial situation.
Why I Believe This Was Unfair
Under the Financial Conduct Authority’s rules, lenders are required to ensure credit is affordable both when it is issued and throughout the life of the account.
In my view, Onmo failed to properly meet several key regulatory requirements, including:
CONC 5.2A – Affordability assessments
Lenders must assess whether the borrower can sustainably repay the credit.
CONC 6.7 – Post-contractual treatment of customers
Firms must treat customers fairly once the credit agreement is active.
Principle 6 – Treating Customers Fairly
Principle 12 – Consumer Duty, which requires firms to avoid foreseeable harm to customers.
Despite increasing my interest rate dramatically, Onmo never asked me to reconfirm:
- My income
- My outgoings
- My financial circumstances
Increasing a card to nearly 54% APR without reassessing affordability raises serious questions about whether the decision was responsible.
Operational Issues with the Account
The interest rate increase was not the only issue.
I also experienced problems with how the account was administered.
Despite having a Direct Debit set up, payments were taken successfully but my account was still marked as late. I also received warnings about potential late payment charges.
At the same time, the Onmo app showed conflicting information about whether a Direct Debit even existed.
So the system appeared to:
- Take payments
- Suggest a Direct Debit was active
- Still mark the account as late
Not exactly confidence-inspiring.
These types of operational issues matter because they can directly affect a customer’s credit file, which has long-term consequences.
A Pattern of Interest Rate Increases?
Another thing that concerned me was that this situation did not appear to be isolated.
Public reviews suggest that many customers experienced significant APR increases shortly after opening their accounts.
If that pattern is accurate, it raises an important question:
Was the product ever realistically affordable at the original rate?
Or was the initial pricing simply a stepping stone before a large increase?
That is exactly the type of question regulators expect lenders to be able to answer.
What I Asked Onmo To Do
In my complaint, I asked Onmo to carry out a full review of the situation and provide several things.
These included:
- A review of the affordability checks performed when the account was opened
- A review of the interest rate increase decision
- Either restoring the original APR or closing the account without detriment
- A refund of any interest or charges resulting from unaffordable lending
- Written confirmation that no adverse credit reporting would result from their system errors
- A copy of all affordability and risk assessment data they hold about me
These are all fairly standard remedies when raising an affordability complaint.
When a Lender Does Not Respond
Under FCA rules, lenders have eight weeks to issue a final response to a complaint.
In this case, Onmo did not provide a satisfactory response, so the complaint was escalated to the Financial Ombudsman Service (FOS).
The Ombudsman exists specifically to handle disputes like this when customers and lenders cannot resolve issues directly.
The process can take time, but it ensures an independent review of the facts.
Why Affordability Complaints Matter
Affordability complaints are not about avoiding responsibility for borrowing.
They are about ensuring lenders follow the rules designed to prevent people being placed into unsustainable debt.
The FCA requires lenders to ensure that credit is:
- Affordable
- Responsible
- Managed fairly throughout the life of the account
When those standards are not met, consumers have the right to challenge the decision.
Final Thoughts
Anyone rebuilding their finances knows the goal is stability.
High-interest credit cards can sometimes help rebuild credit history when used carefully, but sudden and extreme interest rate increases undermine that goal.
In my case, the lack of reassessment, the operational errors, and the scale of the APR increase raised enough concerns that escalating the issue to the Financial Ombudsman Service felt like the only reasonable option.
I will update this post once the Ombudsman has reviewed the case.
If you believe a lender has provided unaffordable credit, you have the right to complain. Taking that step can feel intimidating, but sometimes it is the only way to ensure companies are held accountable.
