Can MBNA increase the Interest rate to ridiculous 34%?

madhusudhan

I am taking this balance at a high alert state - and making all the possible avenues to clear this off.

One interesting fact is that everytime I call the bank, the advisor *ALWAYS* advises me to take a loan from loans.co.uk company. Can they do so?

madhusudhan

I called them up to seek the interest rate hike history (the dates on which they have increased my rate). Here are the details.


Abbey:
As of today: 29.9 (Balance Transfer and Purchases) & 34.9 (Cash Advances)
28 July 2008 21.9 & 27.9
28 Jan 2008 18.9 & 21.9
29 Jan 07 9.9 and 9.9

Virgin
As of today34.9 & 34.9
27 May 2008 27.9 & 27.9
26 Sept 2007 24.9 & 24.9
29 March 2007 15.9 and 20.9

A&L:
As of Today 34.9 & 34.9
29 May 2008 27.9
30 July 2007 16.9 and 22.9

In some cases (Abbey), they have increased three times in the same (2008) year!!!

debtdesperado

Exactly the same thing happened to me, with a £10k balance on the MBNA card; I complained but got nowhere. When I did the debt snowball I was in tears (had another £15k of debt on other cards which had also started to creep up but not as fast the MBNA rate!) and had horrible sleepless nights as it was going to take decades to pay off.

What I found was that the widely advocated 'credit card shuffle' simply doesn't work in this situation.... there is no way that you can get another balance transfer for a single card for that amount...most cards do two or three thousand max opening balances, and that is if your credit score is good (three credit searches within 6 months will wreck your credit score though)...(naturally, the credit card companies are well aware of this, even if the well-meaning majority of MSE isn't).

Sorry to be a bit pessimistic...

The silver lining was that it scared me so much I consolidated all my debt into a short, sharp shock loan which I will pay off in two years with 5.9% interest, and am now paying off the last drips and drabs of my cards and gradually shutting them down completely. I am NEVER going to have another credit card...

poker_face

debtdesperado wrote: »

Exactly the same thing happened to me, with a £10k balance on the MBNA card; I complained but got nowhere. When I did the debt snowball I was in tears (had another £15k of debt on other cards which had also started to creep up but not as fast the MBNA rate!) and had horrible sleepless nights as it was going to take decades to pay off.

What I found was that the widely advocated 'credit card shuffle' simply doesn't work in this situation.... there is no way that you can get another balance transfer for a single card for that amount...most cards do two or three thousand max opening balances, and that is if your credit score is good (three credit searches within 6 months will wreck your credit score though)...(naturally, the credit card companies are well aware of this, even if the well-meaning majority of MSE isn't).

Sorry to be a bit pessimistic...

The silver lining was that it scared me so much I consolidated all my debt into a short, sharp shock loan which I will pay off in two years with 5.9% interest, and am now paying off the last drips and drabs of my cards and gradually shutting them down completely. I am NEVER going to have another credit card...

Glad your on the right track now
Credit is always a gamble at the end of the day

mummytofour

I suggest that if you are struggling please go over to the debt be wanna be bored and get some help from the guys and gals over there.

debtdesperado

Quite scary that until seeing 34% and thinking wow that sounds high, and then looking into what it actually meant via all the tools and helpful advice on this site, I had no idea about the effect of the interest rates on how long it would take to pay back....:o

Never again!

madhusudhan

I wrote a compain to MBNA - as debtdesperado said, I am not to optimistic - but atleast I will fight.

I also spoke to Ombudsman - they are sending a request to MBNA for in-depth investigtion on my accounts.

I am on my second job now

madhusudhan

Can the same thing to be done by mortgage comapnies? No, right - although some deals are variable deals. Then why can't the same to be applied here in this situation?

latecomer

If you are on the lenders standard variable rate then you could potentially see the same issue as there is nothing to stop them increasing it.

BikingBud

Poker_Face

Credit is always a gamble at the end of the day

No credit card is not always a gamble. It is debt to be managed effectively or be prepared to pay for mismanaging.

MBNA have effectively been cornering the market for some time, they are in the money lending business they are not a charity. Once they felt that there were no further options to transfer debt then it was obvious that they would screw the rate up.

BB