MBNA: 5% fee but payment order changing

chattychappy

It's not news, I know, but I got the letter this morning saying that from September payments will be applied to the balance attracting the highest interest rate first.

At the same time fees for BTs, cheques, and money transfers will be 5%.

Looks like some of the interest that will be lost to MBNA by this new scheme will be mitigated by collecting fees up font.

I've never mixed balances, so I think I'm worse off under the change in regulation which has prompted this.

izools

Well like we all said last year, it will be the financially apt like chattychappy and Mozette that pay for this new scheme which panders, as usual, to the lowest common denominator plebs who can't understand payment orders, subsequently blaming the financial institutions for their ineptitude.

It's always the stupid that complain the loudest and screw it up for the rest of us

TFD_2

izools wrote: »

Well like we all said last year, it will be the financially apt like chattychappy and Mozette that pay for this new scheme which panders, as usual, to the lowest common denominator plebs who can't understand payment orders, subsequently blaming the financial institutions for their ineptitude.

It's always the stupid that complain the loudest and screw it up for the rest of us

I disagree, I think this is ethical and fair payment allocation.

Plus it will increase flexibility with existing cards.

izools

TFD wrote: »

I disagree, I think this is ethical and fair payment allocation.

Plus it will increase flexibility with existing cards.

Let's see what Stoozing.com has to suggest next year

Mozette

TFD wrote: »

I disagree, I think this is ethical and fair payment allocation.

Plus it will increase flexibility with existing cards.

Do you think it 'ethical and fair' to advertise 0% BTs and charge a flat rate interest fee then? Misleading at best I would think, but obviously I factor that in to any BTs, though I dare say there are those who don't. If I wanted a LOB rate I'd go for one that was at least up front about it - as I indeed have.

fozmcfc

Mozette wrote: »

Do you think it 'ethical and fair' to advertise 0% BTs and charge a flat rate interest fee then? Misleading at best I would think, but obviously I factor that in to any BTs, though I dare say there are those who don't. If I wanted a LOB rate I'd go for one that was at least up front about it - as I indeed have.

I think you have misunderstood what was said. the 5% is the initial fee, currently around 3% for Virgin etc... not a LOB

As the OP said upfront fee.

TFD_2

fozmcfc wrote: »

I think you have misunderstood what was said. the 5% is the initial fee, currently around 3% for Virgin etc... not a LOB

As the OP said upfront fee.

No, I think you misunderstood their post - the initial fee for a BT is effectively a flat interest rate, and I agree with them that calling a BT 0% but charging 5% up front is misleading, and I don't know how long they'll get away with it for, but any step towards honest pricing and less catches is a start.

izools

Given that annual fees must be taken into account with the advertised APR of credit cards, I feel the government should set the same rule for balance transfers etc...

Ergo the APR would then be 5% not 0% on balance transfers. As that is how much you are charged atop the debt over the course of a year.

fozmcfc

Mozette wrote: »

I understand perfectly. It is a 5% charge on the amount transferred. Sneaky way of charging while advertising as 0%.

Personally I wouldn't dream of taking a CC without finding out the T&C. By doing so I can avoid the traps of negative payment heirachy, but with a BT fee you have no choice. And really, if someone is so slack as to not read the T&C, or at least the summary box, they'll probably just see 0% and not even think about the BT fee.
Either way, it can still be a decent deal, you just need to put more thought in than the old days when it was just 0%, decent returns on savings and stoozing was a no brainer!

A fee has been charged for ages now by 99.9% of companies to do a balance transfer, so in effect, they will up it by 2%.

So instead of advertising 0% with 3% BT fee, they will now be advertising 0% with 5% BT fee.

Still a hell of a lot cheaper than paying £50, £100 or more in interest every month.

fozmcfc

TFD wrote: »

No, I think you misunderstood their post - the initial fee for a BT is effectively a flat interest rate, and I agree with them that calling a BT 0% but charging 5% up front is misleading, and I don't know how long they'll get away with it for, but any step towards honest pricing and less catches is a start.

I don't think I have misunderstood at all, the only difference to now is that the fee is up from 3% to 5%.

People don't seem to be complaining about it now and it's been standard practice for a couple of years now to charge an upfront fee of 2.98 + to do balance transfers. I really don't see what the massive issue is here.

As I've said still a hell of a lot better than paying 10, 12, 14, 16 etc months of £100's of pounds in interest surely.

TFD_2

fozmcfc wrote: »

I don't think I have misunderstood at all, the only difference to now is that the fee is up from 3% to 5%.

People don't seem to be complaining about it now and it's been standard practice for a couple of years now to charge an upfront fee of 2.98 + to do balance transfers. I really don't see what the massive issue is here.

As I've said still a hell of a lot better than paying 10, 12, 14, 16 etc months of £100's of pounds in interest surely.

Yes but nobody said otherwise! You're arguing, when nobody disagrees with you.