MBNA promotional rate payments

Morgad01

Hi there, I'm new to the forum and I've joined to get some guidance on this specific question.

I have two promotional rates on a single MBNA CC, one that finishes in May 2025 and one that finishes in June 2026. The one that expires in May has a smaller balance and a lower interest rate than the June 2026 one, so all payments to that card are going to the balance whose deal finishes last.

I contacted MBNA to ask for payments to be reallocated to the balances but was told that payments are always allocated to the higher interest rate first, which would make sense in most cases but not this one.

If they'd allocated the payments the way I would prefer, in May when the first deal expires the compound interest of the 2 balances would be circa £90 per month. Instead the compound interest will be closer to £150 per month.

Is there anything I can do to get them to reallocate the payments the way that is more beneficial to me?

CliveOfIndia

No.  Legally they have to prioritise payments to the highest-rate debt.

molerat

Which one started first, that is how MBNA allocate payments when both are at the same rate.

We use your payments to pay off balances charged at the highest interest rate first and so on down to balances with the lowest
interest rates.

If there is more than one type of balance at the same interest rate, they are normally paid off in the following order: cash
transactions, purchases, balance transfers and money transfers, and then default charges (plus any interest or charges incurred
as a result of those balances). For each type of balance, your payments will pay off the oldest balance (and related fees, charges
or payment protection insurance) first.

CliveOfIndia

molerat said:

Which one started first, that is how MBNA allocate payments when both are at the same rate.

OP said they were at different rates, so MBNA have to prioritise the higher-rate portion first.  You're right, though, if you've got two balances at the same rate it'll be as stated in the T&C's - which can vary from one lender to another.

Morgad01

CliveOfIndia said:

No.  Legally they have to prioritise payments to the highest-rate debt.

Thanks....

In most cases this would be fine, except for this case... 

Morgad01

molerat said:

Which one started first, that is how MBNA allocate payments when both are at the same rate.

We use your payments to pay off balances charged at the highest interest rate first and so on down to balances with the lowest
interest rates.

If there is more than one type of balance at the same interest rate, they are normally paid off in the following order: cash
transactions, purchases, balance transfers and money transfers, and then default charges (plus any interest or charges incurred
as a result of those balances). For each type of balance, your payments will pay off the oldest balance (and related fees, charges
or payment protection insurance) first.

The one that started first and ends first is on a lower rate. So currently, none of the payments are being allocated to that balance 

CliveOfIndia

Morgad01 said:

In most cases this would be fine, except for this case... 

Morgad01 said:

The one that started first and ends first is on a lower rate. So currently, none of the payments are being allocated to that balance 

Bear in mind, by prioritising payments to the higher-rate debt you'll end up paying less interest overall.  So they're actually doing you a favour.  Well, not a favour as such, as I say that's legally what they're required to do.  But you get what I mean