MBNA increasing credit card interest rates

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bb12

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Have been with MBNA for years and have used them mainly as a low interest credit card on balance transfers. Have a large-ish outstanding balance with them, have been a perfect customer and never missed any payments etc.

I currently pay 11.9% interest. Just got a letter from them telling me they are increasing that rate to 15.9% effective from august! That's a big hike!!

When i rang to complain about the excessive hike and told the guy on the phone that i thought mbna were joking, he just burst out laughing! i told them i'd have to close the account if the hike went ahead, so he told me some department will be getting back to me in the next few days to discuss.

has anyone else been informed of such a hike? it's a bit rich, right?
 
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Are you using your credit card as a source of medium/long term credit - i.e. do you normally/constantly have an outstanding balance? If so then it sounds like you are not managing your finances in the most prudent fashion possible.
 
As an aside on MBNA, be very careful not to miss or even make a late payment as they will record this on your Irish Credit Bureau immediately.
 
am the perfect customer with them so have never missed or had any late payments with them. in fact have always rang them up every 6 months or so to reduce the interest rates and they've always done so or given me a 6 months lower rate etc. Which is why i'm very surprised at the sudden hike! am just interested to know if it's a cross the board thing or just me!!

I know how to manage my finances fine btw. i can easily switch this to a loan account if i wish. the credit card suits me at the moment. better than putting unsecured short-term debt onto mortgages anyhow, as is often recommended here!!
 
I pay 10.9% on my MBNA card. I got a letter a few days ago to inform me of an increase but it was cash transactions (cheques/atm) only.
 
bb12 said:
I know how to manage my finances fine btw. i can easily switch this to a loan account if i wish. the credit card suits me at the moment. better than putting unsecured short-term debt onto mortgages anyhow, as is often recommended here!!
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Unsecured credit at 11.9% to 15.9% is ununlikely to be the most competitive rate on offer. However you say that you have been getting a discount but it might still need to be significant to compete with rates on other credit sources.
 
bb12 said:
better than putting unsecured short-term debt onto mortgages anyhow, is
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Not necessarily true - borrowing at lower interest rates makes sense if the total interest payable is less than it otherwise would be if you left a term loan run it's course. In terms of the interest rate hike on your cc card - there are much better rates available out there from the likes of [broken link removed] or [broken link removed] to mention two.
 
in my opinion, you should never transfer unsecured credit such as credit card debt and personal loans unto secured loans such as a mortgage. you're putting you home at an unnecessary risk.
 
Maybe I have read the letter wrong and drawn the wrong meaning from it, but it is stated exactly as follows;

"Your monthly interest rate for cash transaction on new and existing balances wil be increased to 1.3852 % effective on the first day following your statement date in July 2007. Cas transactions include withdrawals at cash machines and over the counter transactions such as at banks as defined in your terms and conditions. This will not effect the rate that applies to your card purchases, balance transfers or cheque transactions."

Therefore, I believed it to mean that the interest rate won't be changing on the balance you already have or for purchases or even if you write one of their cheques. I thought it meant, that only cash withdrawn at an ATM or inside at the counter of a financial institution would be charged at this higher amount.

I could be wrong as I said, but I don't think I am.


 
TDON said:
Maybe I have read the letter wrong and drawn the wrong meaning from it, but it is stated exactly as follows;

"Your monthly interest rate for cash transaction on new and existing balances wil be increased to 1.3852 % effective on the first day following your statement date in July 2007. Cas transactions include withdrawals at cash machines and over the counter transactions such as at banks as defined in your terms and conditions. This will not effect the rate that applies to your card purchases, balance transfers or cheque transactions."

Therefore, I believed it to mean that the interest rate won't be changing on the balance you already have or for purchases or even if you write one of their cheques. I thought it meant, that only cash withdrawn at an ATM or inside at the counter of a financial institution would be charged at this higher amount.
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Any existing cash part of your balance will be subject to the rate increase as I highlighted above.
 
Ok Demoivre, I must be going blind cos I can't see where you highlighted this above.:confused:
 
I had 2 credit cards, MBNA and BOI, both of which I was paying €40 a year for, and 15.9% per annum on. I recently decided to stop the insanity, get rid of them both, and get a Halifax one; 9.5% APR, and 6 months interest free on balance transfers _and_ purchases. When I told MBNA I was cancelled my account, the customer care person directed me to their sales line. Rang out with no answer.

Anyway, just before finally cancelling, they got in touch with me again and tried to offer me a "special" rate of...... 12%. I pointed out that since I was about to get 9.5%, this wasn't really that special. The salesperson went on how about how I had a long relationship with MBNA, and that it would be a shame to lose it over a few percent. I agreed, and said would that mean they would offer me 9.5% too?

Of course not.

P.
 
Have just done what I should have done in the beginning and phoned MBNA. The length of time you have to wait before you actually get speaking to a person, being a serious deterrant.

Anyway, I was told that their Market Dept. have spent all weekend answering questions about this.

The answer I got was as follows:

Their computer system that calculates the interest on your account is able to differentiate between a transaction that is carried out at a retailers and one at an ATM or a cash withdrawal in a bank etc. So going forward, the transaction carried out in a retailers will continue be charged at the normal rate of interest applied to your account, but the cash withdrawal at the ATM or in a bank, will be charged at the new higher rate that you were notified about.

So basically it stays the same unless you withdraw cash as opposed to paying for something with your card. I don't know of many people that would withdraw cash from their Visa using their card as the interest is charged on that transaction immediatedly. However I suppose anyone can get stuck, in which case they would be better off writing one of the MBNA cheques. Whilst again the interest will be charged immediately and not from the next statement, at least you won't be paying it at the higher rate as it is not a cash transaction, as defined by MBNA.
 
TDON said:
However I suppose anyone can get stuck, in which case they would be better off writing one of the MBNA cheques. Whilst again the interest will be charged immediately and not from the next statement, at least you won't be paying it at the higher rate as it is not a cash transaction, as defined by MBNA.
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I was always under the impression that these MBNA cheques that they insist on irritating me with every month are charged as a cash withdrawal.
 
DaveD said:
I was always under the impression that these MBNA cheques that they insist on irritating me with every month are charged as a cash withdrawal.
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I actually told them not to send me anymore and they told me they were putting a note on their computer and I wouldn't get anymore. The following month, I was sent a BOOK of them!!!

Anyway, the letter I got from them specifically states:

"This will not affect the rate that applies to your card purchases, balances transfers or cheque transactions"

Therefore the rate will remain the same. However, you will be charged interest on it from the date the cheque is cashed. Therefore even if you are one of the people that clears their balance to ensure no interest charges, on the particular month you write the cheque, there will be some interest charges that month, for the amount of days that this amount has remained unpaid.
 
Aileen2 said:
What's an MBNA cheque?
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If you have a Visa card with MBNA they send you out cheques, to "encourage" (for the want of a better word!) you to write cheques against your Visa account with them. They then charge you interest on the value of the cheque, applicable to your MBNA Visa account, from that date up to the date you pay it off.
 
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