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MBNA Minimum Payment Increase
Comments
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As soon as you contact a creditor and tell them of the possibility of financial problems, they will usually consider you to be a higher risk and either cut your credit limit, hike your APR or both. They want to minimise their exposure and maximise their income, probably assuming that you are likely to default and enter a DMP which frequently involve the freezing of interest (and therefore loss of income for the creditor).
If your rate increase happened before you lost your job (or told them about losing your job) then chances are, they have just reassessed your account and consider you to be a higher risk to them - possibly because of the total outstanding debt you have (including debt with other creditors).
Good luck sorting this all out. You may want to pop along to the Debt Free Wannabe board and ask for help and advice - people are very good with budgeting, etc over there and most have been in this position themselves - can be handy to have support of others if you do end up entering a DMP as it can seem daunting to begin with but you will feel like you have had a huge weight lifted off your shoulders when things get goingMy posts are my own opinions based on my experiences and info gathered from sites such as this.
They are not a substitute for professional financial advice - but you knew that already didn't you?VSP 2011 - Member #25 - Started 6th December 2010 - Total As Of 4th May 2011 (21 weeks in!) - £323.67/£500 - So far so good!0 -
As you say, you knew the monthly payments would increase when the 0% period expired - it's not MBNA's fault that you have lost your job and are now in the position of not being able to repay what you owe.
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End of the day, everyone has the option of either planning for the worst case scenario - or, failing that, accepting the consequences of not having any such plan in place.
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Sounds harsh I know
I took it that toriajw was only in part blaming MBNA for this situation ie to the extent they would be raising his minimums. (Not the element that related the deal coming to an end.) The thread's moved on anyway.
Whilst I agree you should plan for the "worst case scenario" - what could that mean? Minimums being increased to 10% of the outstanding balance? 50%?
People do have the right to reject interest rate rises precisely because it was held to be unreasonable that people should have to plan for that particular scenario.
Personally I believe people should have the right to reject ANY detrimental change in a similar way - or alternatively perhaps a longer notice period should be required.0 -
Got my letter Saturday.
I do agree with others, that as the change is a significent one for some, that the closure of the card and repayments at the current terms and conditions should be allowed.
Luckily it won't affect me as my balance is only £400 and at 0% till June and I only intend to use the card for 0% offers anyway.
I did notice that if you are already on a reduced payment plan the letters say it won't affect you.
Also that some people are already paying back as per the changed T&C's if you got a card since the middle of 2009. I got mine in April 2009 so probably was one of the last to get it at the older repayment conditions.0 -
In the leaflet that came with the letter, Virgin Money acknowledges that this is a significant change:
"As this could be a significant change for some of our customers, we are giving as much support as we can to help you understand what these changes could mean to you. For more information visit myvirginmoney.com/minimum payment or call us on 0800 068 8686. Please have your most recent statement to hand."
Whilst I acknowledge that we agreed to terms that said they could change the minimum, I think we should be able to opt-out of this significant change. For me it means that an extra 145 pounds a month will be going to pay off my Virgin balance at low APR, and 145 less (from my overpayments above minimum) going to pay off my Barclaycard balance at high APR. Anyone that argues that this is 'good for me' should keep their opinions to themselves and learn some simple mathematics. The net result is that I pay more interest every month on my combined debts than I would have done if I'd continued as before, paying off the card with the highest APR first.0 -
Hi all I to have received the letter from virgin money I have 5000 on my credit card (stupidly) :-( . My minimum payment is normally approx £198 how much extra will the increase make it ?0
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Speedbird85 wrote: »Hi all I to have received the letter from virgin money I have 5000 on my credit card (stupidly) :-( . My minimum payment is normally approx £198 how much extra will the increase make it ?
Are you sure you aren't on the new calculation method already?
What's your APR or your monthly rate (see your statement)? And do you have a large cash balance on the card?0 -
Hi I think my apr is 16.9 it says on statement my rates of interest are card purchases 2.52 % my interest charged this month was 144.82 it says est interest next month is 149.73 I got my balance wrong it's 60530
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Hi Speedbird. If your interest rate is 2.52% per month, that would be an APR of about 34.9%. :eek:
You say your estimated interest on a balance of approx. £6000 is £149, so that's also consistent with an interest rate of about 2.5% a month.
If the card APR was originally 16.9%, then you must have missed at least one notification of an interest rate rise, which is a shame as you would have had the chance to reject the rise, close the account and keep paying it off at the old rate.
Did you originally have a 0% deal on this card? It's a long-standing MBNA tactic to raise the standard interest rate by a large amount not long before the 0% deal expires.
With your monthly interest and balance it does look like you won't be paying much more, if any more, from April, as 1% plus interest charged would be about £205-£210 per month, based on your last two months' interest.0 -
It's gonna kill us people already paying £100 a month in interest anyway.0
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