MBNA cancellation request gave 22% -> 7.9% rate drop

scillystuff

I rang the freephone MBNA number this morning (0800 062 062) intending to cancel my card as I have cleared the balance. This following Martins advice for improving my credit score and 22% APR is just crazy as a rate. Many menus later I reached a real advisor.

"How can I help you"
"I'd like to cancel my account"
"I'm sorry to hear that, why do you want to cancel?"
"Your interest rates are too high"
"I can reduce your rate to 7.9% for the life of the card starting from tomorrow, this includes new purchases?"
"Um, OK thanks..."

So I don't really want the card, it has over 13k limit, I probably still won't use it, but I can't bring myself to cancel it as it is a better standard rate than a few of the other cards I have. Am I wrong?

Paul_Herring

scillystuff wrote:

So I don't really want the card, it has over 13k limit, I probably still won't use it, but I can't bring myself to cancel it as it is a better standard rate than a few of the other cards I have. Am I wrong?

Depends on if you plan on having CC debts again. If you can clear the balance every month now, it doesn't matter how much the interest rate is since you won't be paying any.

scillystuff

Paul_Herring wrote:

Depends on if you plan on having CC debts again. If you can clear the balance every month now, it doesn't matter how much the interest rate is since you won't be paying any.

I have other CC debts, but thanks to advice from this site and balance transfers they rotate between 0% and 5.9%. I haven't used MBNA for the balance transfers due to the 2% charge. I use Goldfish for monthly purchases as I get ASDA vouchers from the points (0.75% equiv cashback) and customer service has been excellent, but I clear it each month. I cancelled Capital One last month due to interest rate hikes and poor security on their web site, so I guess I'll leave it at that.

Thanks for the advice.

Joe_Bloggs

I would say get rid of it as soon as possible. Leave on amicable terms. You'll free up some potential credit limit that can be used with 0% cards on offer from other lenders. You can always go back to MBNA at a later date through its many disguises eg Virgin.

The MBNA credit limits seems to spiral upwards for no good reason. If other potential lenders can see what your limits are with MBNA then they are more likely to grant you smaller credit limits on their special deals. That unused 13K is costing you in a subtle way.
J_B.

Reaper

I agree. There is little point in holding on to a card if you never intend using it. While 7.9% LOB is a vast improvement on their previous rate you can still beat it (eg Texaco).

It's an interesting but sad fact of life that those who are offered the best deals are those who are no longer in debt. You are their perfect customer - you have had debts on the card but in the end proved yourself able to pay them off. Those who are struggling and missing payments would never be offered such a deal even though they desperately need them. Sorry - just a little reflective off topic moment.

Paul_Herring

scillystuff wrote:

I have other CC debts, but thanks to advice from this site and balance transfers they rotate between 0% and 5.9%. I haven't used MBNA for the balance transfers due to the 2% charge.

I'd cancel the card then - it lowers your available credit (may help getting 0% in the future) and allows you to be a 'new customer' to MBNA in a few months.
Another alternative would be to get another (branded) MBNA card (Virgin perhaps - appears to be no fee on initial BTs) and transfer the limit from the old card to the new one.

mrcow

Personnally I'd cancel the card too.

£13k is a high limit, and the general idea is to rid yourself of credit card debts, not accrue more. To me, it would just be another unwanted temptation to spend some money, and as you say, you can do better than the rate they've given you.

They can cancel it on the phone for you immediately, no problems.

Walletwatch

Paul_Herring wrote:

Another alternative would be to get another (branded) MBNA card (Virgin perhaps - appears to be no fee on initial BTs) and transfer the limit from the old card to the new one.

I don't think you can do that - transfer a balance from one MBNA card to another, as they are offered by the same provider. I do agree though that the best thing is to cancel the card, and request for a higher credit limit on any other MBNA card that you may have, if that is currently in it's 0% rate period.

GlennTheBaker

I had an MBNA and a Virgin card at the same time and when the 9 months 0% on the Virgin card came to an end I phoned up to cancel. They told me that I could transfer the limit (not a balance) from the Virgin card to the MBNA (which I kept open). I think this is what Paul_Herring was saying.

Paul_Herring

Walletwatch wrote:

Paul_Herring wrote:

Another alternative would be to get another (branded) MBNA card (Virgin perhaps - appears to be no fee on initial BTs) and transfer the limit from the old card to the new one.

I don't think you can do that - transfer a balance from one MBNA card to another, as they are offered by the same provider. I do agree though that the best thing is to cancel the card, and request for a higher credit limit on any other MBNA card that you may have, if that is currently in it's 0% rate period.

I said transfer the limit, not the balance. It is preceisely because they are from the same provider, that allows you to do this.