Wrong info from MBNA?

scotslad1983

Hello there.. I have come to the end of my 0% period on my MBNA card, and my £6000 has successfully not accrued interest over the past year.

I have received my final statement of this 0% period and it tells me the interest estimated for next month is £127.91 (a disgusting 29.9% APR!!) ... and I read from Martin's articles in the past that if I pay off my balance in full then I escape this interest payment - I remember him saying if I left a penny on the card I'd pay interest on the whole lot. However, I phoned MBNA and paid off half the balance, and I was planning on using a balance transfer to clear the rest, but the advisor said that even if I did that I would still have to pay the interest next month because it is calculated per day?

Is he wrong?

normanmark

You only paid off half the balance. If you paid off the full balance then you wouldn't have accrued the interest. On your next statement it'll show the payment you made & half the balance left on the card. From that is where the interest will be calculated and it'll display on the next statement.

Interest is calculated per day, the advisor is correct.

scotslad1983

Thanks.. although I do plan on paying off the other half today, if this will save the interest payment next month?

YorkshireBoy

You'll need to pay two consecutive statements in full by their respective payment due dates to stop any residual interest.

The alternative is to overpay the next statement (pay the statement balance + next months 'estimated interest' figure + a fiver or so).

NickX

If the £6000 was a Balance Trannsfer originally, then you need to clear this in full before the 0% promotion end date.

There is no standard interest free period on Balance Transfers, so even if you pay the statement in full, if that payment date is after the promotion end date then you will incur interest on a daily basis for this period.

I think the MBNA rep is correct.

Many people get caught out on 0% deals by going past the promotion end date and thinking that they can settle the statement after the promotion has ended in full. This does not work, you need to clear the balance before the promotion end date.

YorkshireBoy

NickX wrote: »

...you need to clear the balance before the promotion end date.

Which in the case of MBNA run cards is always a statement date.

They operate like this for a reason. By the time you see an 'estimated interest next month' figure on your statement it's too late...you're already accruing interest!


OP, I'm somewhat surprised that, once you'd received the 'your rate is going up to 29.9% APR' letter, you didn't act sooner to transfer the remaining balance to another card?

Little_Chicken

NickX wrote: »

If the £6000 was a Balance Trannsfer originally, then you need to clear this in full before the 0% promotion end date.

There is no standard interest free period on Balance Transfers, so even if you pay the statement in full, if that payment date is after the promotion end date then you will incur interest on a daily basis for this period.

I think the MBNA rep is correct.

Many people get caught out on 0% deals by going past the promotion end date and thinking that they can settle the statement after the promotion has ended in full. This does not work, you need to clear the balance before the promotion end date.

Wow! I never realised this before - but am usually good and tart my money off a month before the offer runs out. Will remember this in future tho.:beer:

2tired

I took out a 6 months interest free card with Ulster bank on 19th Feb - I too pay the debt off before the end of the interest free period. I calculate this to be 19th August but apparently Ulster bank work on 30 day months and reckon its the 11th. They can't accept debit payment over the phone so that means I will be a few days over & charged interest - when is 6 months not six months - when you bank with Ulster bank!

YorkshireBoy

2tired wrote: »

when is 6 months not six months - when you bank with Ulster bank!

Maybe I had your share?

My BT was posted to my account on 26th October last year and my 0% expired on 13th May (6.5 months ), which was my statement date...a coincidence, or how it should be?

I assume you got the 11th from your penultimate statement, and not via the telephone?

NickX

2tired wrote: »

when is 6 months not six months - when you bank with Ulster bank!

Also when you bank with Abbey Zero

These promotions do seem to finish early more often then not. I am starting to feel that this in breach of the Trade Descriptions Act.

Best advice is to contact the Card Provider before the promotion expires and request the specific date by which the account needs to be settled to avoid incurring interest.

scotslad1983

YorkshireBoy wrote: »

OP, I'm somewhat surprised that, once you'd received the 'your rate is going up to 29.9% APR' letter, you didn't act sooner to transfer the remaining balance to another card?

I didn't receive such a letter. I thought I had a month or so to go on 0% so was slightly taken aback when I noticed the estimated interest sum.