Minimum Payments with MBNA: Has your card been affected?

Beate

I haven't received a letter from A&L yet but if I do the solution is simple for me - I will stop using that card and use another.

gulch

I received the MBNA letter at the weekend and was furious - I'd been deliberately paying off a fixed amount per month so as to avoid the "67 year" trap, and their suggestion that they were switching me to minimum payments so as to help me avoid financial problems is hugely insulting.

I will be writing to them to make that I'm not having this. Anyone else I should copy the letter to - FSA?

cassey1

I received letter from A&L.I phoned them as soon as i recieved the letter,they advised there was nothing i could do. I was furious. I have set up a S/O. Will be paid off in a couple of months and then i wont use the card.

shellfishoes

Had the same thing done to me - I overpaid every month to keep the debt going down from month to month then received a letter saying only the minimum would be collected by direct debit.

I now overpay by Standing order to get around this. When it's cleared I'll go elsewhere if I need to.

MBNA are not acting responsibly in my view especially in the current climate.
For those struggling to overpay but do it, it's going to tempt those to just pay off the minimum and thus end up in deeper debt.

MSE_Dan wrote: »

What's happened?
Many Moneysavers are receiving letters saying their credit card Direct Debit's being dropped to just the minimum repayment, especially from MBNA cards (inc. A&L and Virgin).

This could be a really expensive thing for some borrowers, possibly adding £1,000s to the cost of paying off the debt. If you have received a letter from your card provider , please reply below and tell us who it is.

The Excuse

Apparently as some have fixed Direct Debits lower than the minimum, it's stopping fixed repayments for everyone.

The Nightmare Cost

Making the min repayment on a standard MBNA card means it'll take 67 years to repay a debt of £5,000, costing £29,300 in interest.

What to do

Tell it how unhappy you are. If it forces the switch, then if possible use the 'pay off in full' option. If not you've two choices.

A. Stick with the minimum repayment and ensure you manually overpay each month.
B. Set up a standing order from your bank account to pay a fixed amount each month

I wouldn't suggest you ever just cancel the minimum repayment and go for a pure manual payment each month. That leaves you open to the risk of a late or missed payment fine, which can hit your credit score, and with MBNA mean you lose any promotional deals.

Guide & Calculator: Danger Minimum Repayments

If you have received a letter from your card provider, please tell us below

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CarrW_2

I have been paying £250.00 per month by direct debit to Virgin for 0% balance transfer deal for the last 7 months this suits me fine as it is within my budget and means that I am paying more than the minimum payment, now they have told me I can only pay the minimum amount by Direct debit and can only pay more if I set up a standing order or send a cheque each month, this is really inconvenient for me, I will keep paying the minimum by Direct debit, but will now send in a cheque each month but I will have to remember to do it. Surely they are the ones losing out, I am sure a lot of people will only pay the minimum and will forget to pay more or just will not bother, surely it must benefit them if people pay more.

jandrews_2

How do they benefit if the customer pays more....???? Just think about it....

Its just common sense that they are better off the longer it takes people to pay back whatever they owe. ...in all honesty, they would rather everyone pays the minimum each month....

I havent had this letter yet, but maybe that is because I pay the balance in FULL each month. I use a Virgin MBNA Amex card.....and its great for me as all my spending is converted into Virgin Airmiles which I use to upgrade or or buy flight tickets.

Back in the summer I used the miles (100,000 of them) to fly myself and my now fiance to Los Angeles for just £400 of taxes...thats a whopping saving off £8000.....

All of these cards are great tools if you use them properly, from someone who was in £50,000 of credit card of debt at 23, I have really had to learn that the hard way...and I'll never OWE them a penny again that I havent spent myself....

purplemoon

I got 'the letter' from Virgin last week. I have complained and *at some point* will set up a standing order to top up.

It is irritating.

IWantToBeFree_2

I personally don't get what the fuss is about, yes MBNA are probably trying to put a veil over why they are actually doing it, however, I fail to believe that spending a few minutes setting up a standing order is that troublesome for people.

It seems that people want to be spoon fed instead of just taking responsibility for their debt.

mdj1

It's not the FSA who have anything to do with this, its the OFT (Office Of Fair Trading) I spoken to everyone else and didn't get anywhere, OFT are looking into the problem 'apparently'

itaaot

Halifax, guity as charged. Noticed only today that they changed min repayments from 180 a month to 90 a month of which 56 is interest. Cant be arsed to phone them, will just pay the extra 100 manually.