MBNA interest payments exceed minimum payment

Haroldm

I have a MNBA BMI credit card.

My balance is 3172.28. Last months payment was 52.08. The interest on this months statement is 56.08.

The interest rate is 22.9% APR.

I believe that the I have negative amortisation or very close to it.

The minimum payment being taken is £25 plus interest.

I just spoke with them asked when the debt would be cleared based on the current minimum payments. The first girl said that the card would be paid off appropriately in 4 years. The second girl had no idea.

I feel that is incorrect and that it will take longer than 25 years. 3000/25= 10 years for capital alone.

I have the following questions for the forum.

1/How or where can i calulate how long this will take to be repaid?

2/MNBA refuse to change the minimum payment via DD - can this be construed as a refusal to accept payment or a settlement of debt by the courts? They also state the minimum payment was in their contract. However I believe the minimum payment used to be higher and they changed the contract unilaterally, in order to keep customers in debt for much longer?

3/Is there anything else i can do?

Thanks

Any

I think you are mistaking DD for something else. You either have Fixed DD (council tax - 10x the same amount per year, until invoice - which is not changing - amount is reached) or variable DD (credit cards, phone bills). There is absolutely nothing illegal for credit card companies offering only minimum or full DD - any idea what costs would be involved setting it up so the payments would be whatever anyone wishes to pay?

You can set up SO (standing order) - you are in full control of that - but be carefull about the due dates on your statements, sometimes they vary. I personally have minimum DD set up for all my cards and manually pay extra every month (if needed).

Yes, there is a calculator somewhere here on the site, I will have a look where it is.

Ditch_Crawler

Haroldm wrote: »

I have a MNBA BMI credit card.

My balance is 3172.28. Last months payment was 52.08. The interest on this months statement is 56.08.

The interest rate is 22.9% APR.

I believe that the I have negative amortisation or very close to it.

The minimum payment being taken is £25 plus interest.

I just spoke with them asked when the debt would be cleared based on the current minimum payments. The first girl said that the card would be paid off appropriately in 4 years. The second girl had no idea.

I feel that is incorrect and that it will take longer than 25 years. 3000/25= 10 years for capital alone.

I have the following questions for the forum.

1/How or where can i calulate how long this will take to be repaid?

2/MNBA refuse to change the minimum payment via DD - can this be construed as a refusal to accept payment or a settlement of debt by the courts? They also state the minimum payment was in their contract. However I believe the minimum payment used to be higher and they changed the contract unilaterally, in order to keep customers in debt for much longer?

3/Is there anything else i can do?

Thanks

Since you pay the interest off every month, plus £25 off the capital, your calculation of 10 years is correct. There's nothing to stop paying additional amounts at any time.

Ditch

Any

http://www.moneysavingexpert.com/cards/minimum-repayments-credit-card#calc

CLAPTON

from the information you have provided it is clear your debt will grow as the interest is greater than the repayment; however I'm not certain about your figures as you seem to have quoted the payment for one month and the interest for another....
so it will never be paid off is to continue to pay only the minimum payments

obviouly stop spending on it and
set up a SO or make an additional payments each month

Ditch_Crawler

Credit card companies would never allow the minimum payment to be less than the previous month's interest. The MBNA regime is very simple - the monthly minimum is interest and charges plus £25

speedbird1973

You're interest in the 2nd month will be a little bit less than the 1st month. Not relevant to this case, but interest can exceed the min payment so long as over a 12 month periode min repayments exceed total interest charged

Haroldm

Firstly thanks for all your helpful and very fast replies.

Clapton you are right, i used payment and interest on same statement rather than interest from previous month to make fair comparison.

Speedbird, yes this is true that interest rate varies depending on month length.

This has really shocked me as the repayments are jumping around

Jan Statement
Jan Bal 6156.06, Payment 3000, min pay 26.06, interest 62.88
Feb Bal 3192.88, min pay 67.88, interest 47.28
Mar Bal 3172.28, min pay 52.28, interest 56.04
Next min pay 61.04

On my other MBNA card they move between 85 interest in dec, 104,36 in jan, 86 in feb and now 91 in march.


Amy, The calculator that you sent doesnt work. MBNA need a fixed amount plus a monthy interest element rather than a fixed percentage as other companies do.

I could set up a SO but its their attitude that irks me.

Why should i have the hassle to set to set up another electronic payment system, if i am trying to repay my debt. They "dont" want bankrupt customers and the economy needs to reduce debt in order to grow. Prolonging the customers period of repayment helps no one except the bankers bonuses if i cannot spend.

I created a calculator specially for MBNA but i cannot see how to post it here.

My debt will take 69 months, nearly 6 years to payoff and cost 1281.73 in remaining interest. The fact that their staff don't know this makes them appear like loan sharks.

By contrast Egg, a professional company, my account is being paid off at the rate of £300 per month and i know that my debt will be cleared in 3 years.


Thanks

ILW

Haroldm wrote: »

Firstly thanks for all your helpful and very fast replies.

Clapton you are right, i used payment and interest on same statement rather than interest from previous month to make fair comparison.

Speedbird, yes this is true that interest rate varies depending on month length.

This has really shocked me as the repayments are jumping around

Jan Statement
Jan Bal 6156.06, Payment 3000, min pay 26.06, interest 62.88
Feb Bal 3192.88, min pay 67.88, interest 47.28
Mar Bal 3172.28, min pay 52.28, interest 56.04
Next min pay 61.04

On my other MBNA card they move between 85 interest in dec, 104,36 in jan, 86 in feb and now 91 in march.


Amy, The calculator that you sent doesnt work. MBNA need a fixed amount plus a monthy interest element rather than a fixed percentage as other companies do.

I could set up a SO but its their attitude that irks me.

Why should i have the hassle to set to set up another electronic payment system, if i am trying to repay my debt. They "dont" want bankrupt customers and the economy needs to reduce debt in order to grow. Prolonging the customers period of repayment helps no one except the bankers bonuses if i cannot spend.

I created a calculator specially for MBNA but i cannot see how to post it here.

My debt will take 69 months, nearly 6 years to payoff and cost 1281.73 in remaining interest. The fact that their staff don't know this makes them appear like loan sharks.

By contrast Egg, a professional company, my account is being paid off at the rate of £300 per month and i know that my debt will be cleared in 3 years.


Thanks

So your point is that MBNA are rubbish?

Haroldm

my point s that MBNA do not anything to help the customer reduce their debt!! In fact they make it impossible for a client to do so. One little button is needed to change the percentage.

ILW

Haroldm wrote: »

my point s that MBNA do not anything to help the customer reduce their debt!! In fact they make it impossible for a client to do so. One little button is needed to change the percentage.

Why would they want to help the customer reduce their debt? Debt is their business.