MBNA (AA) credit card sleight of hand

prowla

A while back I took out an AA credit card, made a single purchase and really didn't pay much attention to it, and just made random payments off my balance on the assumption that it would cover it more or less. (I don't normally manage my finances like that - it was just this particular card, so please don't flame me.)

Some months I missed the due date and was charged penalites & interest. That's all my fault and I have no complaints about it.

However,...

I've found out that if I made payments before a given month's statement date then they would not count towards that statement, and so I received penalties for that too.

In other words, if my statement was produced on the 8th of a month with a due date of the 26th, then I would have to make a payment from the 9th to the 25th in order for it to count.

There were several months where I paid on the 1st, but was still charged the penalty and interest.

So I was penalised for paying in advance of the statement.

It doesn't seem particularly fair to me and in all honesty I feel like I've been tricked by a sleight of hand.

I've just paid off the outstanding balance, but I thought I'd share this as a warning.

dazza.mk

prowla wrote: »

A while back I took out an AA credit card, made a single purchase and really didn't pay much attention to it, and just made random payments off my balance on the assumption that it would cover it more or less. (I don't normally manage my finances like that - it was just this particular card, so please don't flame me.)

Some months I missed the due date and was charged penalites & interest. That's all my fault and I have no complaints about it.

However,...

I've found out that if I made payments before a given month's statement date then they would not count towards that statement, and so I received penalties for that too.

In other words, if my statement was produced on the 8th of a month with a due date of the 26th, then I would have to make a payment from the 9th to the 25th in order for it to count.

There were several months where I paid on the 1st, but was still charged the penalty and interest.

So I was penalised for paying in advance of the statement.

It doesn't seem particularly fair to me and in all honesty I feel like I've been tricked by a sleight of hand.

I've just paid off the outstanding balance, but I thought I'd share this as a warning.

You would find that pretty much applies to all credit cards not just MBNA/AA. If you set up a Direct Debit for the minimum payment this won't be an issue and any additional payments can be amde whenever you like.

thenudeone

So you have to pay the minimum payment after a statement is produced?

Just like every other credit card?

If you don't understand when payments are due on a financial product, you shouldn't have signed up for it.

Harsh but true.

InsideInsurance

If you made it before the statement was produced then you simply made two payments to the previous months statement rather than one to each. Just because you overpay one month doesnt allow you to underpay in the following month.

You are always safest having a DD that covers the minimum payment and then you can always make supplementary payments if you want - be sure you are aware how the supplementary payments will effect the DD though as not all card issuers are the same (RBS still take full DD, Barclarys adjust the DD to compensate, Santander stop the DD even if the payment is below minimum etc)

davp

prowla wrote: »

A while back I took out an AA credit card,

Some months I missed the due date and was charged penalites & interest. That's all my fault and I have no complaints about it.
...
It doesn't seem particularly fair to me and in all honesty I feel like I've been tricked by a sleight of hand.

I've just paid off the outstanding balance, but I thought I'd share this as a warning.

I had a bad experience with MBNA too (see other thread) so I sympathise. The T&Cs do seem designed to catch you out, but they are typical I'm afraid. The difference I've found with MBNA is their refusal to relent for any reason, and online transactions do not always run smoothly.

You could try the Financial Ombudsman, but they're likely to be only interested in whether the T&Cs were followed. That such a document is almost impossible to absorb entirely is considered irrelevant.

davp

thenudeone wrote: »

Just like every other credit card?

If you don't understand when payments are due on a financial product, you shouldn't have signed up for it.

Harsh but true.

Do you run a CC company?

Fingerbobs

All credit cards work like this, to the best of my knowledge.

If you make a payment on the 1st of the month, but the Due Date printed on your last statement was the 26th of the previous month, your payment is late.

Gromitt

davp wrote: »

You could try the Financial Ombudsman

Not a chance. Before you can go to the FOS you have to exhaust the complaints departments of the issuer first, and what are you going to complain about? "I've been fined as specified in the T&Cs for breaching the T&Cs due to the fact that I failed to make a payment by the due date" ?

davp wrote: »

That such a document is almost impossible to absorb entirely is considered irrelevant.

If you don't understand the T&Cs then don't accept them.

tomsco

davp wrote: »

I had a bad experience with MBNA too (see other thread) so I sympathise. The T&Cs do seem designed to catch you out, but they are typical I'm afraid. The difference I've found with MBNA is their refusal to relent for any reason, and online transactions do not always run smoothly.

You could try the Financial Ombudsman, but they're likely to be only interested in whether the T&Cs were followed. That such a document is almost impossible to absorb entirely is considered irrelevant.

The T&C's are not there to catch you out, if anything they're there to help you understand what is required of you and what is required of the lender. As you said, the difference is one you've found, others have pointed out in your thread that they have had success in refunds onto the account, but it is entirely up to the lenders discretion as whether to allow this or not.

Why would you waste the FO's time. As others have pointed out, if you have not attempted to comprehend the T&C's than you alone are at fault.

prowla

As I said, please don't flame me, o great cognoscienti.

I clearly said that where I failed to make a payment by the due date I was justifiably charged a fee for doing so. That is not the point and there's no need for the lectures, thanks.

The point that I am making is that I also made payments between one statement's due date and before the next one's issue date, and that seems to be some sort of limbo whereby it's not counted as a payment off that next statement, and so I was charged the non-payment fee because I paid early.

prowla

InsideInsurance wrote: »

If you made it before the statement was produced then you simply made two payments to the previous months statement rather than one to each. Just because you overpay one month doesnt allow you to underpay in the following month.

Fingerbobs wrote: »

All credit cards work like this, to the best of my knowledge.

If you make a payment on the 1st of the month, but the Due Date printed on your last statement was the 26th of the previous month, your payment is late.

No - I made an additional payment on the 1st of the month, but because it was before that month's statement was issued, they charged me a non-payment fee.