A cautionary tale about MBNA

jowie

I signed up for an Alliance & Leicester card about a year ago to clear some debt I had at 0% for the year. I discovered when the card came that it was actually MBNA. I'd heard some nightmare stories surrounding them, however since the card was on 0%, I thought I'd keep with it.

Last month, I was unfortunately two days late with payment. It was the last month of the 0% and my original plan to use the card to pay off at 0% hadn't worked, these things sometimes happen. However I was horrified to see I had been charged nearly £200 in interest and therefore exceeded my limit. I was charged for both exceeding the limit and paying late, even though I had telephoned to explain the situation to them in advance. When I have done that previously using my LloydsTSB card, they have put a note on the account and I have been refunded the fee.

When I rang them up to ask about why the huge interest charge, they told me that the rate had been reset to 27.9%. I was horrified! I would never sign up for a card that would have said the rate was going to revert to that amount after the 0% period. The lady told me that I was sent information in the post to tell me about the new rate, which I denied ever receiving.

I was wrong. That evening, I went home and poured over some letter addressed to my PARTNER (who had recently received a joint card on the account)... In there was a small-print leaflet of about 8 pages. On about page THREE, in small letters, under a sub-point, the interest rate was laid out... 27.9%. Not in a letter to me. Not even on the cover letter but in some small-print.

I rang back MBNA today and asked them why the interest rate was so high. They told me my account had been reviewed and that the interest rate I had been given was 27.9%. I asked them why it wasn't a normal credit rate as it would have been when I signed up, and they told me that the "interest rate is variable". I'm now aware how variable they can make their rates!

I told the lady I would like the rate reviewed. The best she could do for me was 20.9%. I reluctantly accepted and made my disgust of MBNA made perfectly clear to her without being rude. I told her I would be moving my money quickly and would be warning everyone possible to steer well clear of MBNA.

My mood at that point: :mad:

Next stop, LloydsTSB. I have held an account with them for some years and for good reason, they have never done anything to make me angry. They have given me good deals, always helped me out when I've been in tight spots and cleaned up a bad situation when my account was subject to fraud. I asked the lady on the phone if I could set up a balance transfer from my credit card. It was no problem to them at all and offered me two rates, 4.9% for 6 months, or 7.9% for the life of the transfer. I went through the details, both people I spoke to were friendly and helpful and the matter was sorted in approximately five minutes.

My mood at this point:

It just goes to show how one bank can completely get it right and how another one can get it so wrong. I had been warned about MBNA before and now at least I have learnt that lesson I hope my words will help others. My experience with them shows they deliberately target people having difficulties by sticking the most ludicrous interest. Disgusting behaviour.

:-Joe

Moggles_2

Thanks for your feedback, Jowie.

Hope getting it off your chest was therapeutic and, as you say, warns others.

Presumably you checked the payment due date on your MBNA statement. Another favourite trick is to bring this date forward a day or two. Unsurprisingly, notice of this change is embedded in the accompanying small-print leaflet.

Btw, now you've shifted your balance to another card, stand by for a sizzling balance transfer offer from MBNA - I'd put money on it!

jowie

Moggles wrote:

Btw, now you've shifted your balance to another card, stand by for a sizzling balance transfer offer from MBNA - I'd put money on it!

They can try, but that account is being closed quicker than a window on a stormy day... :P

If there's one thing I've learnt from this episode, is that you should look at the long-term rates and effects rather than the short-term quick-sell ones. I could transfer the balance around until I'm blue in the face, but 7.9% forever is as good as having a fairly decent loan with no limits on how much I pay each month.

I have transferred a small amount until I receive word back about the nice Barclaycard Flexi-rate application... If that's not successful then I'll transfer the rest to LloydsTSB and be done with it. No more MBNA for me!

cheers

:-Joe

YorkshireBoy

jowie wrote:

They can try, but that account is being closed quicker than a window on a stormy day... :P

Think very carefully before cancelling the MBNA card. I have had 2 x 0% repeat offers from Virgin - and so has my wife. A more-or-less continuous 21 months of 0% for both of us. How did we get it? We simply played by the rules, paid on time (DD is very useful you know), and they responded with a better offer each time we asked.

By closing the card all you are doing is 'cutting your nose off to spite your face', and you may live to regret it - when you've calmed down.

So, before you ignore my advice, remember that 2 people have responded to your post - and both have said "watch out for another 0% offer"!

jowie

Thanks, I will keep my eye out for such an offer. But personally I'm once-bitten-twice-shy. I've heard too much bad stuff about MBNA and this just goes to prove what they can be like. I'd much rather reap the benefits of a rate that is forever because, as was the case in this last year, you just don't know what's round the corner and how easy you are going to find paying off the amount. I'd hate to find myself right back where I started in 12 months' time. They aren't stupid, if they give me a great deal then it's for a reason.

Personally I'd want them to go that little bit further. I'd want them to tell me the rate they'd give me after the 0% period in writing, plus I would also want a balance transfer with no handling fee. If they gave me that then maybe we could talk.

markmc999

I have to say I havent had any problems with MBNA apart from them cold calling me offering me a 0% deal which I was already being offered online. I explained that I'd do it later online when it was convenient to me. They said "oh well, we will beat it on phone". I explained I didnt have my credit card details at the moment and asked them to call the next day. They didnt so I rang them with no record of the call I was stuck

Did BT anyway and sent an email to their complaints team, within a few days I got an email saying that they'd increased the length of the deal as per my request.

Oh and has been said ALWAYS have a minimum payment DD set up so that if you ever forget to pay the bill your minimum will always come out and at least stop you getting any charges

jowie

markmc999 wrote:

Oh and has been said ALWAYS have a minimum payment DD set up so that if you ever forget to pay the bill your minimum will always come out and at least stop you getting any charges

It's a good idea granted, however I've stopped that since once the DD came out and there wasn't enough money in the account, therefore I was charged TWICE. :eek: since there are two of us paying the bills it doesn't always necessarily all work around one bank account - sometimes it's down to cash payments.

johnllew

Surely the interest rate for non-promo BTs was shown on your statement? Look just below the "Payment Due Date". Admittedly, it's likely to be the monthly rate but just multiply by 12 to get the annual rate.

I agree with what others have said about the possibility of a repeat low rate BT offer. We've had them from MBNA for years and have made thousands of pounds from them. (Always, always pay the monthly payments by DD).

MBNA? - lovely company!

jowie

Yep, thanks for your comments. One person is very likely to have a bad experience with a company and another can quite likely have the complete opposite. These are just my experiences, although my parents had some bad experiences with them too and they have an extremely good credit history.

Personally I won't be using them again. I refuse to deal with a company that was unwilling to give me any help when I am in a slight tight spot. There are many other people I have had accounts with for many years and none of them have been this stubborn. BT rates be damned, offers are two-a-penny these days, I'm going to take my debt elsewhere

YorkshireBoy

jowie wrote:

...offers are two-a-penny these days...

Really? How many of them will give you 1,000's of pounds of credit limit without a credit search, let you move your balance to them (even overdrafts), and only ask you for £5 a month* in return? Answer...none. MBNA are alone in offering this.

I'm constantly amazed by the number of people who post on here that they've missed a £5 payment and, as such, have lost a 0% deal, paid over £200 in totally unnecessary interest, and blown their credit ratings. They (MBNA) couldn't make it any easier if they tried!

I'm even more amazed by those, having been armed with the tools and advice to get it right next time, who then say "sharks...they're not getting any more of my business".

Lets get real here. £5 isn't even 2 pints in some drinking establishments!


* Obviously this minimum payment should be exactly that - a minimum. You should pay more wherever possible.

dazed

YorkshireBoy wrote:

Think very carefully before cancelling the MBNA card. I have had 2 x 0% repeat offers from Virgin - and so has my wife. A more-or-less continuous 21 months of 0% for both of us. How did we get it? We simply played by the rules, paid on time (DD is very useful you know), and they responded with a better offer each time we asked.

By closing the card all you are doing is 'cutting your nose off to spite your face', and you may live to regret it - when you've calmed down.

So, before you ignore my advice, remember that 2 people have responded to your post - and both have said "watch out for another 0% offer"!

Completely agree with all YB said. IF you have spoken to the right department they would look to rectify your 'mistake' and see you back onto the rate and offer you were on.

But you missed a payment and the terms that you agreed were broken and therefore you were charged the agred rate that you signed up to. IF the rate was put up then you would have had a letter from them to say so, call the loyalty dept on 0800 783 1116 and see what they can do. But please use some tact when calling and do not 'demand' to refund and close the account as the loyalty dept are just trying to help. I used to work there so I know

And my wife still does

I wont tell you mine or her name or she will kill me if she gets a manager call