MBNA interest payments exceed minimum payment

CLAPTON

in any event I trust that you are over paying the maximun you can afford to the debt with the highest APR as this will pay the least interest and clear the debts the quickest.

no_more_cards_for_me

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 should they try to reduce your debt, they are in business to make money lending. No credit card company will ever have your best interests at heart, they will be more concerned with extracting every last penny from you in interest charges.

CannyJock

Ditch_Crawler wrote: »

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

Nope, you're mistaken there. Latest MBNA minimum payment is 1% before interest is added so your balance will grow if you're only making minimum payments - have a look at a Virgin card for yourself - http://uk.virginmoney.com/virgin/credit-cards-v12/popup/summary-option1.jsp - you've got one of the "old" cards that's still £25 plus interest so you're actually better off than newer customers making minimum payments.

Ditch_Crawler

CannyJock wrote: »

Nope, you're mistaken there. Latest MBNA minimum payment is 1% before interest is added so your balance will grow if you're only making minimum payments - have a look at a Virgin card for yourself - http://uk.virginmoney.com/virgin/credit-cards-v12/popup/summary-option1.jsp - you've got one of the "old" cards that's still £25 plus interest so you're actually better off than newer customers making minimum payments.

Not quite true (the way I read it, anyway...!). If it were true, then I would agree with the OP that they were taking the mickey. I understand it to mean that they take 1% of the capital balance, and then add the month's interest and charges to arrive at the minimum payment. So if your balance was more than £2500, the monthly payment would be greater than interest and charges plus £25

D.

noh

CannyJock wrote: »

Nope, you're mistaken there. Latest MBNA minimum payment is 1% before interest is added so your balance will grow if you're only making minimum payments - have a look at a Virgin card for yourself - http://uk.virginmoney.com/virgin/credit-cards-v12/popup/summary-option1.jsp - you've got one of the "old" cards that's still £25 plus interest so you're actually better off than newer customers making minimum payments.

from that link:-

"Minimum repayment
whichever is the greater of: £25; or 1% of your statement balance before any default charges and interest (to which we'll then add the default charges and interest)."

Which means the minimum repayment will always be more than the interest. So the balance will decrease by 1% or £25 whichever is greater with each minimum payment.

CannyJock

noh wrote: »

from that link:-

"Minimum repayment
whichever is the greater of: £25; or 1% of your statement balance before any default charges and interest (to which we'll then add the default charges and interest)."

Which means the minimum repayment will always be more than the interest. So the balance will decrease by 1% or £25 whichever is greater with each minimum payment.

Nope.

Consider a balance of £3,000 at their advertised typical rate of 16.6% APR or 1.2881% per month.

You minimum repayment is £30.

Your interest added is £38.64

See how it works?

CannyJock

Ditch_Crawler wrote: »

Not quite true (the way I read it, anyway...!). If it were true, then I would agree with the OP that they were taking the mickey. I understand it to mean that they take 1% of the capital balance, and then add the month's interest and charges to arrive at the minimum payment. So if your balance was more than £2500, the monthly payment would be greater than interest and charges plus £25

D.

Yeah, would be nice. But that's not how they do it. See above. Then refer to numerous other threads with people complaining they're making minimum payments and their balance keeps on increasing. You'll even see some where as a result of this their balance exceeds their limit and they incur additional charges.

noh

CannyJock wrote: »

Nope.

Consider a balance of £3,000 at their advertised typical rate of 16.6% APR or 1.2881% per month.

You minimum repayment is £30.

Your interest added is £38.64

See how it works?

I read it that the minimum payment would be £30 plus the interest of £38.64 a total of £68.64

Ditch_Crawler

noh wrote: »

I read it that the minimum payment would be £30 plus the interest of £38.64 a total of £68.64

That's how I read it too

milliemonster

Why don't you just make addtional payments? MBNA obviously won't budge on their payment arrangements, with my MBNA card I just send an extra payment each month through my internet banking, it only takes a few seconds so its not much of an effort