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.
Credit providers have the right to make changes to your account at any time. Provided you are not on a low or zero interest introductory fixed rate, they can increase your interest rate, reduce your credit limit, demand immediate repayment and withdraw any associated benefits of services. Moreover, they can do this with less than one month’s notice. This may seem very unfair, especially when we are talking about APRs of around 34%. But what makes it worse is these hikes can put immediately put people over their credit limit, which will also incur further charges. However, the OFT have stated that any fee must accurately reflect costs incurred on the credit provider’s behalf – so if you feel it is unjust, get on the phone as quickly as possible and politely request the fee be scrapped.
So why do credit providers up the APR in this way? It’s often due to their concerns over your credit-worthiness – you may not have been paying very much off the debt, or you may have been late paying. So to avoid the credit provider pulling the rug out from under your feet like this, ensure you are paying back more than the minimum amount each month and doing so on time. If it’s too late and the rug has been well and truly pulled, 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.
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- Credit and Debit Cards
- Consumer Credit Act
- Accessing your Credit File
- Debt Management and Debt Collection Agencies
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We have had a trouble free Alliance & Leicester credit card for about 15 years, invariably paying off in full each month.
Our last 4 statements, (beginning Nov 09, and I suspect co-inciding with the MBNA takeover), have all arrived too late to allow (immediate) payment within the deadline. The Dec statement arrived on a Fri pm with the following Sun as the deadline! Although we live in NW Scotland, none of our other mail suffered notable delays despite the seasonal rush and bad weather.
MBNA have brushed off complaints with a standard response to each and have refused to lift the penalty payments and interest charges, hiding behind the terms of ‘my agreement’ (which was not offered for renewal and signed by me!)
They fail to address comments that the problem appears to co-incide with their takeover of the card.
This is shabby and unethical, the credit card company should have a legal obligation to ensure that statements arrive with adequate time for payment. Next step the ombudsman and a new card provider
Hi,
MBNA cannot be trusted ~ same dirty tricks with hiking interest rates 3 times
till they got to ‘LOAN SHARK RATES’ of 34 %
Never missed a payment ~ always paid mere off than needed.
A good customer that paid them decent interest for the service,
They then basically rob you ~ hiding behind the Credit Consumer Agreement that needs to be tested by a legal team with the Unfair Contract Law.
Basically it is” LOAN SHARKING ”
Letters will follow to the BBC Watch Dog / Newspapers / FCA / ( totally ineffective bunch of highly paid ” No good at selling Insurance ” bods )
MBNA after weeks of writing, have returned my interest payments to acceptable
advertised rates.
Now chasing the over payment ROBBERY !
HOW CAN THEY GET AWAY WITH THIS.
Need to be more careful with my money !
Good luck, Peter
we rang mbna to say we were going to have trouble paying the huge increase they had put upon us, after years of loyal service on a d.d with bank and they told us straight away our card would be cancelled and they promptly put our interest up again,they wanted us to pay £168 a month and with that was £163 interest,so we will pay £5 a mth to our account…rediculous it would take 55 years to pay it of when we are dead basically!!! how can they do this,we asked and they said because we not in arrears they cant help us!!!!!pathetic attitude!
Send them the same letter to as many of their differing adresses as you can find, with one as recorded delivery so that they cannot deny receiving it.
Tell them that:
T1. You have no intention of uising the card again. (Consider cutting it up and sending the bits in the recorded delivery letter!)
2. You cannot afford the rise, and you will be paying them off at only five pounds per month, there is no point in you making any payments at all until they revert the interest rate.
3. Someone in authority has to call you. Give them a reasonable time and available number.
If someone calls you from an Indian call centre early on a Sunday morning, ask for their name, tell them that it is harrasement, that you are going to report them and ask for their supervisor. Do this firmly but calmly.
After about two months of being passed from one person to another they will eventually revert the interest rate, but you need to be prepared to fight. Under the latest government guidelines they are supposed to offer you the chance to keep the lower interest rate in return for cancelling card usage. However, MBNA frequently do not. My suspicion is that being American, they think that they are above European law.
Hi Guys
Nice to see the issue is still being talked about. Have been on the cccs plan for 2 years now. I only use cash, when I have little money its nice to know I have so much to last so long and do not use credit cards at all, or ever will.
Nasty things really (credit cards) as they feed on your desires and greed, so you spend money you dont have, especially at christmas on junk made in china!
Credit cards are all part of the New World Order agenda to bring down Britain/ USA e.t.c. Its a planned agenda, I fell for it like many , but woke up just in time. People are waking up, thanks to alternative media like Alan Watt, Alex Jones, David Icke, Jim Corr from the Irish Pop band the Corrs.
We will win this battle if we stick by each other, we have been scammed and lied to by corrupt Government who are heavily in bed with the corrupt bankers.
So while we struggle the bankers get massive bonuses like the Barcleys boss Bob Diamond gets NINE 9 Million Pound bonus.
Nice name Bob Diamond seems fetching. Why Nine million , because he is being rewarded for robbing you and me, its the Global Elite who are behind this, its a planned bring down.
See Georgia Guide stones. They want us like China/Russia.
Totally communist/facist.
Please research. Thank you all and hope you cope with the mess the corrupt bankers have forced on us.
God Bless
I took out two credit cards, one with Abbey National and one with Alliance and Leicester. Little did I know that they were both administered by the crooks at MBNA and that they were entitled to hike my interest rates to 34.9%! My husband passed away at a very young age shortly afterwards and I am sorry to say that I used these credit cards to make ends meet. I have, however, paid the required amounts every month for the past seven years until three months ago when I lost the second job I was doing to repay my debts. I have been trying to sell my house to repay these punitive debts, and today rang MBNA asking them please to help by reducing the interest rates and set up a payment plan, at least until my house is sold. Even telling them all these the very rude man on the other end said judging by our conversation “I was not in long-term financial difficulty and they would do nothing to help or reduce the interest rates until my accounts were brought up to date”. And yet enclosed with their most recent letter was a leaflet advising to contact the credit card companies straightaway if are in financial difficulty. Well my advice is, don’t bother, they don’t do anything constructive to help and just speak to you like some sort of down and out because you are in financial difficulty.
They are adding £400 each month in interest to my accounts, plus charges, and at that rate by the time my house goes through there’ll hardly be enough to pay them off let alone find somewhere else to live.
Anyone reading these, please please never take out any sort of account with MBNA and ensure that any credit card you are taking out thinking it is with a reputable company is not administered by these bunch of crooks!!
Dear Jean
I will try to help with if I can, please contact the consumer credit counselling service. They will set up a payment plan for you that you can afford, whilst leaving you enough to live on. . They will contact all the credit card companies for you to organise this, and the relief will be just incredible. You make one payment a month and the CCCS distribute the amounts amongst the card companies.
Don’t bother contacting the credit card companies direct, they will not help you “whatsoever”. The credit card companies will go berserk with you for days on end. Do not talk to them, tell them to contact the CCCS and hang up.
Please, please, please I beg you do not sell your home to try to settle your debt. You can sort this out and keep your home.
Please please do not take out a secure loan on your home, often the credit card companies will try this one. Its a scam. Remember credit card debts are not secure loans.
Do not worry about bailiffs calling, they can only do this via the courts if you have made no attempt to make a payment arrangement example with the CCCS. They will threaten you with all sorts but there’s nothing they can do.
Hold tight, sit tight be strong, set up your plan a.s.ap and please note the cccs do not charge you they are a charity. Contact them please ASAP. Its Freephone to the tel no is on there web site.
And give the finger to the credit card companies once and for all, and don’t forget to chop up those nasty compound interest credit cards. I use a simple banker card with no facility for lending whatsoever.
I hope I have helped you Jean and anyone else.
One final point after 6 years your debts will be written off. Im half way through mine and it works..
For more proof of MBNA at its worst click BBC link here.
http://www.bbc.co.uk/news/business-12622318
Thank you for your advice :O)
I am not sure one call MBNA crooks – ruthless, heartless opportunists, customer-hating incompetents, greedy sucking parasites and arrogant beyond Brobdingnagiam hyperbole, but perhaps not quite crooks – I tried to close my account with payments of £6100 ans £150 in one month but they got me for late payment the next month! (I forgot they would be charging interest on the 6 grand I had already paid back for an extra month!)
I urge everyone everywhere to ‘vote with your feet’ and force MBNA to abandon operations on British soil!
I note a search for “MBNA worst bank ever” elicits over 2.5 million hits. Perhaps the bosses at MBNA deserve to be hit 2.5 million times till they realise they need customers to continue raking in their extortionate and most ill-deserved super-bonuses at our expense! They might treat us better then!