Interest Rate Hikes for MBNA Customers
There has been a flurry of complaints surrounding the sharp and unexpected increases in rates of interest payable by users of MBNA credit cards. To make this look slightly more devious, this is tending to take effect around the time that customers come to the end of their introductory low or zero rated interest periods. So customers expecting to revert to the standard rate of 15% after a 6 month introductory rate of 0%, might find themselves facing a rate as high as 29%. What is also confusing matters is that customers are only presented with the monthly rate of interest on their statements rather than the annual percentage rate. So while the former may look reasonable at 2.52%, the reality comes out at an APR of nearly 35%.
Around 7 million of us own and use credit cards which have been issued by MBNA. They are usually branded with a popular high street bank, retailer or corporation such as Virgin or Sony. However it does not appear to be only MBNA guilty of significant increases, and Moneysupermarket.com report that 31% of respondents to a recent poll indicated that their APR had been hiked in the previous 12 months.
So what can you do? The only options are to pay the debt in full, or more realistically, do a balance transfer to an alternative 0% interest rate card provider. But do bear in mind that this is not free, and there will be a fee of 2-3% of the debt moved across. In any case, always ensure you check all your credit card documentation to find that all important APR so you can see what the repayments would be for the life of the debt, rather than what they would be for that month alone.
Comment by Colin Davies on 15 August 2008:
I have received a letter today telling me my interest rate is going up to 29.9 percent by MBNA (Virgin)!!!!!
I am absolutely flabbergasted and disgusted –at a time when they know full well people are struggling and perhaps are leaving balances on their cards more than ever they are taking full advantage. They should be accountable surely?
Given they appear to be the most aggressive in chasing debt (my brother has the misfortune of being pursued by them a few years back)and are constantly sending me cheques to try and con me out of more money this is disgraceful behaviour.
Comment by Mike on 6 November 2008:
I am fighting them. I have been with them for 8 years making regular mimimum payments plus ad hoc additional payments off the balance. I cannot move my balance now it’s too large and banks are very reluctant in the credit crunch. MBNA know this. I cannot pay off 17,000 in one go. The recent hike from 15.9 to 29.9% on this level of balance cause an otherwise affordable payment to become unaffordable, costing 200 pounds per month more and pure profit for MBNA.
This hike was quickly followed by a call centre offering a secured loan, loans uk - which I believe is an MBNA company, with their opening line “now that credit card interest seems to be rising have you considered…..” - Spot the scam ???
I have refused to pay anything further while it will be taken as interest and I am making formal complaints to OFT.
This company needs to be prosecuted. As this post above also points out MBNA do not publish the APR on the statement and they don’t always tell you your interest has gone up. Check it for yourself you are probably paying more than you think. Its the tiny numbers in the back page!!. If you are looking for a card, DONT get MBNA or any of its affiliates such as Abbey / Virgin etc. or you will surely be scammed by them at a later date.
Comment by saam on 11 November 2008:
Same thing happened to me nearly 35% from virgin so many others i guess,shocking !! i wonder where is, FSA, OFT, UNFAIR CONTRACT TERMS ACT 1977 and all others
sitting over 100Ks tax payer salary to protect consumers!!!!!
Comment by CK on 13 November 2008:
MBNA have just doubled my APR without warning to thirty odd percent - I am horrified - it sent me over my lending limit and they are charging me a fine for that - how can that be fair with no warning???? Disgusting!!!!
Comment by john on 15 November 2008:
i was offered a 0% deal by mbna in oct, until jan 09, by text message, i transferred a 10,000 pound debt, when i received my statement, they charged £300 for cheque and £ 250 interest, which equates to 29% annual interest, they still deny sending me the message, ( but its still in my phone)- i have since paid off the total balance , so the tranfer has cost me £550.00 for 3 weeks , they refused to refund over the phone, have sent a letter and will pursue my money through all legal avenues, these are a bunch of robbers, liars, and god help other people who are not able to pay off larger balances ,as these people will bankrupt you with charges, dont forget the £ 250.00 was pure interest, you would never be able to repay the debt in full!- PLEASE DO NOT ENTER INTO ANY AGREEMENT WITH MBNA , AS IF THEY DONT CATCH YOU THIS TIME, THEY WILL THE NEXT,-