Mbna interest increasing while balance decreases?

Suzyc

Can anyone please explain why every few months the monthly interest increases by roughly £30. The card hasn't been used in years and the interest rate hasn't changed. Minimum payment has been paid every month.

Thanks

CLAPTON

interest may well vary month to month as the calculation is based on daily balance: diffferent billing periods have a different number of days due to the length of the month and the location of bank holidays and weekends

maybe post full details

lisyloo

Can't help without further details, but months have between 28 and 31 days, so the most obvious explanation if different length of the billing period.

chattychappy

Is the balance decreasing??

Fruit_and_Nut_Case

Some actual numbers from the last few months would be useful.

Suzyc

The interest rate is 2.252% per month. The minimum payment also seems to fluctuate each month: sometimes it doesnt cover the interest. Its calculated as per 1b of the credit agreement which I can't find.

The balance has reduced by a whopping £40 in the year and about £500 since 2004.

PPI was cancelled in 2001 but was still charged until 2009. When they stopped charging PPI in 2009 the interest rate doubled.

YorkshireBoy

Suzyc wrote: »

The interest rate is 2.252% per month.

So the APR is 30.9%.

The minimum payment also seems to fluctuate each month

That's down to the number of days in the statement period changing.

sometimes it doesnt cover the interest.

The minimum payment will always cover the statemented interest (see below).

Its calculated as per 1b of the credit agreement which I can't find.

Ask them for a copy of your credit agreement. In the meantime, check out the T&Cs on their website...

1b The minimum payment you must pay by the due date shown on your statement each month, including any amount you owe for payment protection cover, will be an amount calculated as follows:

. if your statement balance is £25 or less, it will be the total amount of the balance shown;

. if your statement balance is more than £25, your minimum payment will be the greater amount of either: £25; or 1% of your statement balance before any default charges, card fee and interest (to which we'll then add an amount equal to the default charges, card fee and interest).

https://www.mbna.co.uk/apply/UKCCapp/Ctl/link?eid=4E0F2A7D&KeepThis=true&TB_iframe=true&width=510&height=280&modal=true

Tixy

For most people MBNA changed the way they calculate the minimum payment a few months ago - it used to be the case that it could easily be lower than the interest being charged, and so your interest could easily have been increasing, along with the balance.

Now (since March/April) it should be the interest plus 1% of the balance, so you should find your minimum payment is probably higher but that the balance is now decreasing and the amount of interest will also decrease over time (although obviously can vary a little depending on how many days between statements).

Suzyc

Loved the disorderly quote btw. Unfortunately it's the husband who's giving me plenty of opportunities to make exciting discoveries:rotfl:

Hank_Marvin

my mbna card is 1.2408 what does that make my apr then. And is it 1.2408 x 13 the way to work it out? I.m sure when i took card out it was 16.9% apr

Tixy

Hank_Marvin wrote: »

. And is it 1.2408 x 13 the way to work it out?

I just use this http://www.makesenseofcards.com/mon2yr.html
but x13 gives an approx figure.