MBNA Increasing Interest With No Warning

HillyBillie

Hi All,

I've been snowballing my MBNA card and was managing to pay at least £50 a month extra off the capital every month. For the two months before Jan, my interest added was roughly £40-41. This month it's £45.12, when the balance is now about £150 less than it was. I haven't received the paper statement yet, so don't have full details of the interest added, but have emailed customer services.

Surely this must mean they've increased my interest rate on the account? I haven't received any warning of this and I guess they're obliged to warn me properly in advance of changes like that?

They've still got the min payment as only £5 above the interest charged, but obviously this means I'm going to pay less off the capital each month and take longer to snowball the thing!

Any advice much appreciated.

HB

chattychappy

Do you have mixed balances on it - ie is what you have on the card a balance transfer or 0% purchase deal mixed in with other transactions (eg purchases)?

If so, different parts of the balance will be attracting different rates of interest. Your repayments will be hitting the lowest rate balances first. The effect could be that whilst reducing your balance your interest could be going up as what is left of your balance shifts to higher interest.

Need more info to say - but the balance won't necessarily go down if you are paying more than the min repayment if at the same time you are still using the card.

If they did increase the interest rate they should have told you and you would have had the chance to opt out and continue paying off, though you would have to stop using the card for new purchases.

HillyBillie

I haven't used the card for a long time and I'm not sure if there would be balance transfers etc still on there. If there are, they're from at least 3 years ago. I know this is vague, but it's a card I haven't used for at least 2 years and the account is classed as suspended anyway.

It's stayed at a similar level for so long it was a shock to see the interest go up out of the blue.

HB

Dabooka

Have you tried calling them?

CLAPTON

why not wait until you see the statement or check online

it may simply be thta there are more days in that statment period.. with weekends and bank holidays the length of the period may have changed

geranium72

It will be the fact that the statement period may be longer - ie one may be 28 days and then the next 32 days which does make it look like they are charging more. If you record each payment and interest ( I keep a diary for this purpose) you will see that overall the amounts do go down. I have queried this with them bbefore and that is the reason.

You may see that you get a few months where the interest goes down and then there is a longer statement period (Christmas etc?) where it goes up but the goes down again.

HillyBillie

Thanks for the replies. I didn't have time to call them before - though their call centres drive me batty!

I hadn't thought about the longer time between statements, it probably is that. Thanks a lot!

HB