MBNA Credit Card Catch

Ddubya

Hi

I seem to have been caught out here, so can anyone confirm if this is correct.

I had a few thousand on a 0% MBNA credit card balance transfer that I was paying off that is due to expire on 1st of Jan 2017. I then spent a thousand or so on another card which I transfered over to the same card on a 0% transfer offer which expires on 1st January 2016.

I have been happily making payments that I thought would have paid off the thousand by January, and I would continue paying off the larger sum after that balance was clear.

However I actually looked carefully at my statement this month and they have been allocating the payment against the bigger amount not paying off the second balance transfer first.

What this means is that I will have to pay off the whole £4k before January if I want to not pay any interest, as the 0% on the £1K runs out on Jan 1st and they will charge me interest on this amount from that day. Either that or I have to transfer the whole amount to a different card and pay another fee even though I still have a year of 0% on the £3k balance which I will loose.

This seems a very unfair and devious way of doing things as it was certainly not made clear that I would loose the 0% on my original balance transfer in this way when I took out the second. The terms and conditions just said that they would allocate the payment to the balance that was at the most expensive rate! Seeing as they are both 0% I thought it obviously would be the rate that was running out first that would be the most expensive and cant see how they can argue otherwise?

Can anybody tell me if I stand a chance of successfully making a complaint or do I just need to chalk this up to experience and never give them any business again?

Thanks for any opinions offered!

Serendipitious

I think the usual way that credit card companies allocate payments is to the most expensive interest rate first, followed by the oldest of the various balances if more than one equal rate applies.

As your first balance transfer is the older of the two transfers, and both were transferred in on equal rates ie. 0% deals in both cases, then the payments will be allocated against that first one.

From Jan 2016, though, as the £1k balance becomes the one attracting interest, I would assume that your payments from then onwards would be allocated to that, as that balance would be the more expensive one.

Consumerist

MBNA have been criticised for their devious ways for years.

The trick is to pay off the £1K on the day that it starts to attract interest. It is then the most expensive debt which must be paid off first. You will then pay only one day of interest. What's left of the £4K will continue at 0% for the remainder of the promo period.

Edit
As of 26 Sept, you won't even have to pay a minimum £1 interest charge so it should be just pennies if you get the timing right.