Penalised for extra payments?

tomorrowisanotherday

PandaPaws wrote: »

Hi, I've just called MBNA and the answer is that this months statement was calculated based on a 32-day cycle as opposed to the last couple of previous months both being based on 29-day cycles?! So the extra £15 is because of the extra 3 days. So I guess its just an unlucky month!

I don't believe in "lucky" or "unlucky" where banks are concerned - I think they tailor things to suit themselves, even month to month, as they see how you are paying.

2.59% must be around ?35%-ish APR. If you have any other cards that are, say, 16.9% with some spare credit, it might be worth withdrawing some cash (if around, say, 22% interest) to help pay down the MBNA and reduce your interest charges. Yes, you will have to pay interest (+ a withdrawal fee) on the other card, but not 35%!

YorkshireBoy

tomorrowisanotherday wrote: »

2.59% must be around ?35%-ish APR.

Indeed, 35.9% APR.

If you have any other cards that are, say, 16.9% with some spare credit, it might be worth withdrawing some cash (if around, say, 22% interest) to help pay down the MBNA and reduce your interest charges. Yes, you will have to pay interest (+ a withdrawal fee) on the other card, but not 35%!

There's no need to withdraw cash when the balance transfer rate is usually the same as, or close to, the purchase rate ie 16.9%. Plus, these days cash advances are starting to be recorded on credit reports, which is bad news for those making them!

CarineG

izools wrote: »

Have they increased your APR?

Check the APR on this statement and the last statement.

You may have been RATE-JACKED (this is where the credit card provider raises the APR of the account if they don't feel you are making them enough money - all of a sudden trying to clear the balance at a faster pace might have caused them to do this - so that they still make as much money from you in interest).

Your credit agreement will say the APR is variable, so unfortunately, yes they can do this.

But let's see if that's what has actually happened first

Aren't they obliged to formally let you know that the APR is going up or down?

izools

They are obliged to provide an opt-out option, if the increase is a) detrimental to the customer, and b) over and above the rate of inflation.

As such, MBNA are legally obliged to provide an opt-out to revert back to the old APR, which will result in the account being closed, but the account holder being able to repay the balance at the old rate.

Unfortunately some credit card companies (i.e. my other half's) require a complaint to the financial ombudsman before they actually carry out their legal obligation in this regard

tomorrowisanotherday

I wasn't thinking of it as a regular thing, more of a once or twice cash withdrawal - I am planning to do it next month, to finally pay off and close a CC (also MBNA!) as there will probably be a shortfall of £200-ish with the money available in my current account - just want to be rid of this card! Don't want any more cards - still have 2!

Thanks for the information about the reporting of cash advances on credit reports. They could so easily make CCs available only for purchases (like store cards), but it would not really be to their advantage...