Credit Card Companies Wont Help!

MoneyProbs_2

My girlfriend has had a credit card with MBNA for about 10 years. She first got it when she was in her late teens with only a £300 limit. She paid the balance in full each month and due to this her limit was automatically increased.

As the years rolled by the limit went into the thousands. As she got deeper in to debt the credit limit kept increasing and finally stopped at £5,300. She has had the same limit for 3 years and has been paying £250 per month off the balance since then, which was double her minimum payment at the time.

Since she stopped using the card she has had a direct debit set up to pay £250 per month off the balance. Stupidly she has not opened the statements to check on the decreasing balance as she thought she was paying double the minimum balance, thus reducing the overall balance. However, MBNA kept increasing her interest rate which meant she was no longer paying her minimum amount. Once she had reached her limit and was no longer paying the balance in full each month, MBNA increased the interest payment from the original 15% APR to 36% APR. This has meant that when she finally checked her statement, instead of thinking she owed about £2,000, she was actually over her original £5,300 limit.

When my girlfriend discovered this she immediately rang MBNA to try to arrange a payment plan to reduce the balance on the account. Over the 10 years she has has the card she has paid back the original balance and more but MBNA were not helpful.

They stated that she was an exceptional customer as she had paid on time every month. They then told her that they were not willing to reduce her interest rate unless she was in financial difficulty?

My girlfriend and i live together but she owns the apartment we live in so she pays the mortgage and i pay the utility bills. We are not in financial difficulty but we are about to have a baby and we need every penny we can save.

The credit card company have not been helpful at all and we need a way of paying off the balance. We are happy to clear the balance and pay off the money she owes but the interest rate is crippling us and we find it totally unreasonable.

Can anyone help?

chattychappy

I think her only hope is to get another loan/credit card and transfer the balance to that. It seems she has paid on time and met the minimums, so her credit record should be OK (though I'm not sure about the payment plan + being over the limit - perhaps that's been reported).

Failing that, perhaps you could get a card in your name and clear the balance? Not a fashionable suggestion (to take over someone else's debt) but it seems your finances are going to be embroiled for some time anyway.

I know you think MBNA are being unreasonable, but they are just a business. Interest rates are variable and the mistake was not to open the statements. You are free to take your credit elsewhere. On the figures you give, she is paying well above the monthly interest, so it should be possible to get it down a bit.

stephane_2

what is her credit report like? first thing would be to check it with both Experian & equifax just to make sure that everything is in order...if it is in a good order with no adverse data then why not try applying for a card with a 0% offer on balance transfer and even if she does not get a card with a limit large enough to transfer all of the MBNA debt it will still be better than nothing...but I must say that not checking her statements for that long is deplorable.

opinions4u

Very similar to your post yesterday. Some of the numbers are slightly different.

she has not opened the statements to check on the decreasing balance

It's very hard to pass the blame for things on to the big bad credit card company when she has failed to look after her own affairs appropriately.

I don't understand why you would expect them to reduce the rate.

Can she move to a 0% card elsewhere, or get a personal loan at a lower rate to pay the whole debt off with?

she was actually over her original £5,300 limit

This could mean she will struggle to.