MBNA unclear 0% interest rate

nlong

Hi,

At the end of 2022, both myself and my wife took out credit cards with MBNA.

Both cards were advertised as being 24 month interest free on purchases, which was perfect for our needs. In the first few months of use, we each either paid the full balance or  more than the minimum payments and were charged no interest as expected; however for the last few months we have started to be charged interest.

Having queried this with MBNA it has now been explained that the 0% interest on purchases only applies to transactions made in the first 60 days. Purchase transactions after this period will incur interest charges, unless the balance is paid in full each month. Which really defeats the point of a long term 0% card, especially when you have done a balance transfer!

This was clearly not highlighted during the application process. Having both used credit cards for many years, this is the first time we have encountered this, so we are kicking ourselves that we didn't spot it.

Have now switched providers (having double checked the deal), interested to know if anyone else has been caught out by this?

I have found a very similar post on Trust Pilot, user took their card out at around the same time as us...

I got a MBNA credit card August 2022, it had 24 months interest free on purchases. I spent on it and paid off more than the minimum amount each month and did not get charged any interest. However, with a smaller balance suddenly I was charged interest in March 2023. I questioned the interest charged but was told it was correct. MBNA, not to be trusted, have taken scissors to the card and will be closing the account.

Date of experience: 09 March 2023"

MorningcoffeeIV

A small number of people get caught by it, but the vast majority are aware of the terms of the offer.

Make sure to check both the terms and also to read your statements, so you don't pay interest for months again without realising.

martinbainbridge1975

MBNA is 0% on purchases made in the first 60 days, different to some other card providers

Jennyll87

Same experience here, got caught out. Promptly moved to another provider to not incur interest charges.

martinbainbridge1975

barclaycard and sainsbury's have decent 0% purchase offeres

CliveOfIndia

This is very common.  Some cards will charge 0% interest on purchases made at any time during the promotional period, but in my experience it's far more common for the "purchase window" to be limited to the first 60 or 90 days of opening the account.

nlong said:

This was clearly not highlighted during the application process.

It will have been stated in the Terms & Conditions which you read and agreed to when you applied for the card.

nlong said:

Which really defeats the point of a long term 0% card

Not really - this kind of card can be extremely useful in the scenario where you want to make a single large-value purchase and spread the cost of a number of months.

nlong said:

interested to know if anyone else has been caught out by this?

Yes, I've heard of many people being caught out by this.  Unfortunately, the onus is on the applicant to read and understand the Terms and Conditions.  I know they don't exactly make for the most riveting of reading, but it's really important to read them when entering into any contract - arguably even more so when a financial product is involved.

Marchitiello

I am also puzzled by this type of reports.

I never take cards for the 0% on purchase period, but I do fairly regular balance transfers (stoozing) and most of the cards I take have both a 0% balance transfer offer as well as a 0% on Purchase offer, and for both I receive regular warning (sms, e-mail, statement messages) that the respective promotional period is ending (to do a transfer by XX date or to spend at 0% by XX date). Now, even if I did not understand the offer terms in the first place (entirely my fault), and those messages arriving in my inboxes, I would think to be my responsibility to call up and specifically discuss what those messages means before the interest will start accruing ..  Not checking /understanding T&C, and then Further communication about it, cannot be down to “unclear” lender T&C, even if a guy that has an equal experience make a review on Trustpilot.. Do not sign up to any financial contract you do not fully understand, and if not sure, do not be afraid to pick up the phone and ask specific question with the lender before signing anything up.

Chrysalis

To be fair I would expect it to cover all purchases for the dated period, what a bizarre offer where you just use the card for 2 months and then cease activity, I expect its designed to catch people out

I know many 0% BT work this way, but it just seems so odd for purchases, but you might have better luck with tesco, I know they at least used to let you get 0% all the way through the offer period.  But I dont know if they still do it that way now.

Marchitiello

Chrysalis said:

To be fair I would expect it to cover all purchases for the dated period, what a bizarre offer where you just use the card for 2 months and then cease activity, I expect its designed to catch people out

I know many 0% BT work this way, but it just seems so odd for purchases, but you might have better luck with tesco, I know they at least used to let you get 0% all the way through the offer period.  But I dont know if they still do it that way now.

I think to be very common and very clear and have seen it for years: ”15 months interest free on all purchases made in the first 3 months” or something similar…

having 12 months free on purchases could be equally confusing as purchases on the 12th month would get nothing, 

Chrysalis

Marchitiello said:

Chrysalis said:

To be fair I would expect it to cover all purchases for the dated period, what a bizarre offer where you just use the card for 2 months and then cease activity, I expect its designed to catch people out

I know many 0% BT work this way, but it just seems so odd for purchases, but you might have better luck with tesco, I know they at least used to let you get 0% all the way through the offer period.  But I dont know if they still do it that way now.

I think to be very common and very clear and have seen it for years: ”15 months interest free on all purchases made in the first 3 months” or something similar…

having 12 months free on purchases could be equally confusing as purchases on the 12th month would get nothing, 

We clearly have different ways of interpreting things, whilst you are right the 12th month would be effectively nothing, it just seems much more logical.

e.g. if a broadband company gives you a 12 month discount do you expect that to just be discounted for the first 3 months?

Obviously people who are used to getting 0% purchase cards will know, but I am talking about how someone getting one for the first time would interpret and having not read the finer details of the contract.

Lets take a look at examples, from MBNA.

https://www.hsbc.co.uk/credit-cards/purchase-credit-cards/

Discover the all-rounder that has up to 20 months of interest-free purchases and up to 17 months of interest-free balance transfers (2.99% fee, minimum £5).

Imagine you have never got a 0% card before, please tell me how you would not interpret that to mean only 2 or 3 months of 0% purchases? The only hint it would not mean that is the "up to" words.

Get travel benefits and reward points - plus 9 months interest free on purchases and 18 months interest free on balance transfers (2.99% fee, min £5). Just for HSBC Premier customers.

Again no "for purchases made in the first 3 months".  This one doesnt have "up to" either.

A new customer not used to how these cards work will only know by reading the small print or by discovering they start to get charged interest like the OP.  I think your reply was based on the assumption that people have previous experience of the market.

Although I do think people should be reading the small print of financial products they take out, so I am not excusing people not reading it.

I did click the first card on the page before applying it does have this quote, which makes it very clear if was 0% balance transfers. 

Balance transfers need to be done in the first 60 days to get up to 17 months at 0% interest. A 2.99% fee applies per balance transferred, minimum £5.

Where is purchases in that statement?

Also at bottom.

Additional information

1. At the end of any promotional period, balance transfers and purchases will revert to the standard variable rate.

Might send this to the ASA.

Marchitiello

Chrysalis said:

Marchitiello said:

Chrysalis said:

To be fair I would expect it to cover all purchases for the dated period, what a bizarre offer where you just use the card for 2 months and then cease activity, I expect its designed to catch people out

I know many 0% BT work this way, but it just seems so odd for purchases, but you might have better luck with tesco, I know they at least used to let you get 0% all the way through the offer period.  But I dont know if they still do it that way now.

I think to be very common and very clear and have seen it for years: ”15 months interest free on all purchases made in the first 3 months” or something similar…

having 12 months free on purchases could be equally confusing as purchases on the 12th month would get nothing, 

We clearly have different ways of interpreting things, whilst you are right the 12th month would be effectively nothing, it just seems much more logical.

e.g. if a broadband company gives you a 12 month discount do you expect that to just be discounted for the first 3 months?

Obviously people who are used to getting 0% purchase cards will know, but I am talking about how someone getting one for the first time would interpret and having not read the finer details of the contract.

Lets take a look at examples, from MBNA.

https://www.hsbc.co.uk/credit-cards/purchase-credit-cards/

Discover the all-rounder that has up to 20 months of interest-free purchases and up to 17 months of interest-free balance transfers (2.99% fee, minimum £5).

Imagine you have never got a 0% card before, please tell me how you would not interpret that to mean only 2 or 3 months of 0% purchases? The only hint it would not mean that is the "up to" words.

Get travel benefits and reward points - plus 9 months interest free on purchases and 18 months interest free on balance transfers (2.99% fee, min £5). Just for HSBC Premier customers.

Again no "for purchases made in the first 3 months".  This one doesnt have "up to" either.

A new customer not used to how these cards work will only know by reading the small print or by discovering they start to get charged interest like the OP.  I think your reply was based on the assumption that people have previous experience of the market.

Although I do think people should be reading the small print of financial products they take out, so I am not excusing people not reading it.

I did click the first card on the page before applying it does have this quote, which makes it very clear if was 0% balance transfers. 

Balance transfers need to be done in the first 60 days to get up to 17 months at 0% interest. A 2.99% fee applies per balance transferred, minimum £5.

Where is purchases in that statement?

Also at bottom.

Additional information

1. At the end of any promotional period, balance transfers and purchases will revert to the standard variable rate.

Might send this to the ASA.

You mention MBNA but then refer back to HSBC (that I never used for BT or other offers as I have their WE Rewards Card). 

The way I read the offers is that they clearly mention “up to” in both cases, which if I was new to CC would trigger my curiosity to learn more about it. But again, by experience with MBNA, Halifax and Lloyds CC is that they will keep sending follow up messages about the promotional period to spend and/or do balance transfers coming to an end, so it would be really one’s fault to ignore this as well.