Serious MBNA warning!

bestusernameever

DullGreyGuy said:

bestusernameever said:

So I took out a 0% card for a big purchase. I was aware that the interest free period was for purchases in the first 2 months which I was fine with as this was all I got it for. However for convenience I made a fairly large purchase that I planned to pay off in full when the statement came through. I was surprised when the statement came through today that there was an interest charge of over £17. 

I complained via the chat to an advisor who didn’t seem to understand how credit cards work. It took me several times to get them to tell me which transactions they were charging me interest. They were reticent to provide this and even offered to just waive the interest charge as a gesture of goodwill. I said it wasn’t goodwill to remove a charge that shouldn’t be there in the first place and again requested the transactions in question as I didn’t want to have further charges. They pointed to the transactions, all after May’s statement and before June’s which is dated today. 

I thought this would make it obvious, even pointing to their terms and conditions from their own website. No dice!

I requested to speak to a supervisor who stated the same things as the previous advisor seeming to be unable to comprehend what I was saying (I now believe this to be disingenuous). After finally pushing more he told me that this card has no interest free grace period (what?!?!?) so you will get charged interest daily even if you pay off in full when the statement arrives. 

They clearly know that no one would knowingly make purchases if they were aware of this and are not acting in good faith. The hesitancy to reveal this to be the case suggests they have been told to avoid telling customers, again giving the impression they are deliberately using morally questionable practices to line their pockets at the expense of customers that don’t notice or won’t complain.

I demanded a waiving of the interest charges that have been accrued and will be added to of if I pay off the aforementioned transactions by the payment date, or else give me a deadlock letter to take it up with the financial ombudsman. They agreed to waive the charges but won’t uphold my complaint and state they haven’t done anything wrong. Funny their own terms for credit cards include the up to 56 day interest free grace period with no mention this doesn’t apply to all cards.

I would strongly encourage all to be very careful when considering credit from a company that would act in such a way. I will be avoiding them in the future

Unfortunately this may be a case that requires humble pie...


So, it sounds like you have a standing balance on 0% interest that is being carried forward and then after that you made a purchase that would not be part of the 0% offer?

Assuming that is the case then the new purchase will be incurring interest from day 1, the "up to 56 days interest free" only applies if you are clearing the balance in full each month, if you dont there is no interest free period so on production of the statement there will be interest for the time between the charge being applied and the statement being produced.

It's worth noting that the interest will have been accruing interest in the interim so you may find a trailing charge. 

I’ve never ever paid interest on a credit card bill as I’ve always either had 0% or I pay off in full. It seemed common sense that as I was paying off the 0% if I made a new purchase and paid more than that off at the next statement I wouldn’t get charged any interest. Teach me to rely on common sense. Thanks for explaining. I still don’t think it’s fair but at least I understand what’s going on now and will avoid falling victim to it in the future as I would have paid on a different card if I had known

Grumpy_chap

bestusernameever said:

So I took out a 0% card for a big purchase. I was aware that the interest free period was for purchases in the first 2 months which I was fine with as this was all I got it for. 

So, you took out the card and made a big purchase in the first two months.  This balance is at zero percent.
You are carrying that balance on the card.  You are not paying IN FULL.

bestusernameever said:

However for convenience I made a fairly large purchase that I planned to pay off in full when the statement came through. I was surprised when the statement came through today that there was an interest charge of over £17. 

bestusernameever said:

It was several transactions, including Amazon, guitarguitar and thomann

Then you made some additional purchases while the amount at zero interest remained.
As such, these new purchases incur interest from the date of purchase because you have not cleared the balance IN FULL.

This is what they confirmed in the chat:


New purchases do not benefit from the "up to 56 days" as you have not paid the balance IN FULL and on time.  This is as per the terms & conditions:


I understand why this was confusing, but it is correct.
The only way to gain interest free period on new purchases is if the card balance was cleared IN FULL from the previous statement.
The offer to waive the interest as a gesture of goodwill was fair.  Can you still accept that offer?

grumpy_codger

Grumpy_chap said:

bestusernameever said:

So I took out a 0% card for a big purchase. I was aware that the interest free period was for purchases in the first 2 months which I was fine with as this was all I got it for. 

So, you took out the card and made a big purchase in the first two months.  This balance is at zero percent.
You are carrying that balance on the card.  You are not paying IN FULL.

bestusernameever said:

However for convenience I made a fairly large purchase that I planned to pay off in full when the statement came through. I was surprised when the statement came through today that there was an interest charge of over £17. 

bestusernameever said:

It was several transactions, including Amazon, guitarguitar and thomann

Then you made some additional purchases while the amount at zero interest remained.
As such, these new purchases incur interest from the date of purchase because you have not cleared the balance IN FULL.

This is what they confirmed in the chat:


New purchases do not benefit from the "up to 56 days" as you have not paid the balance IN FULL and on time.  This is as per the terms & conditions:


...
The only way to gain interest free period on new purchases is if the card balance was cleared IN FULL from the previous statement.
...

Can you quote the relevant bit from the T&C? 
"in full each moth"  is too vague. I can argue that in this case once you don't pay it in full you may be chargede interest indefinitely in the future.

ETA: google finds this old similar MSE thread that doesn't clarify anything to me personally:

MBNA unclear 0% interest rate

prettyandfluffy

This is why people recommend that you do not mix 0%/balance transfers/money transfers with spending on the same card, it can get messy and expensive.  Far better and easier to keep them on separate cards.

bestusernameever

Grumpy_chap said:

bestusernameever said:

So I took out a 0% card for a big purchase. I was aware that the interest free period was for purchases in the first 2 months which I was fine with as this was all I got it for. 

So, you took out the card and made a big purchase in the first two months.  This balance is at zero percent.
You are carrying that balance on the card.  You are not paying IN FULL.

bestusernameever said:

However for convenience I made a fairly large purchase that I planned to pay off in full when the statement came through. I was surprised when the statement came through today that there was an interest charge of over £17. 

bestusernameever said:

It was several transactions, including Amazon, guitarguitar and thomann

Then you made some additional purchases while the amount at zero interest remained.
As such, these new purchases incur interest from the date of purchase because you have not cleared the balance IN FULL.

This is what they confirmed in the chat:


New purchases do not benefit from the "up to 56 days" as you have not paid the balance IN FULL and on time.  This is as per the terms & conditions:


I understand why this was confusing, but it is correct.
The only way to gain interest free period on new purchases is if the card balance was cleared IN FULL from the previous statement.
The offer to waive the interest as a gesture of goodwill was fair.  Can you still accept that offer?

Grumpy_chap said:

bestusernameever said:

So I took out a 0% card for a big purchase. I was aware that the interest free period was for purchases in the first 2 months which I was fine with as this was all I got it for. 

So, you took out the card and made a big purchase in the first two months.  This balance is at zero percent.
You are carrying that balance on the card.  You are not paying IN FULL.

bestusernameever said:

However for convenience I made a fairly large purchase that I planned to pay off in full when the statement came through. I was surprised when the statement came through today that there was an interest charge of over £17. 

bestusernameever said:

It was several transactions, including Amazon, guitarguitar and thomann

Then you made some additional purchases while the amount at zero interest remained.
As such, these new purchases incur interest from the date of purchase because you have not cleared the balance IN FULL.

This is what they confirmed in the chat:


New purchases do not benefit from the "up to 56 days" as you have not paid the balance IN FULL and on time.  This is as per the terms & conditions:


I understand why this was confusing, but it is correct.
The only way to gain interest free period on new purchases is if the card balance was cleared IN FULL from the previous statement.
The offer to waive the interest as a gesture of goodwill was fair.  Can you still accept that offer?

Yeah I can still accept the offer. I guess the standard terms were written before such promotions existed and just left alone. They don’t feel in the spirit of the offer and should probably be made clearer but I won’t be making that mistake again

grumpy_codger

prettyandfluffy said:

This is why people recommend that you do not mix 0%/balance transfers/money transfers with spending on the same card, it can get messy and expensive.  Far better and easier to keep them on separate cards.

Well, people recommend many things without understanding anything. Isn't it better to understand than blindly follow all recommendations? E.g. Barcalycard is fine for combining promotional balances with new purchases*.
The reason behind the recommendations is that most CC providers waive the interest on new purchases only if the statement balance is paid in full, that includes paying off the promotional balances along with new purchases.
However, in this particular case the interest allegedly was added even before the OP was given the opportunity to pay the statement balance in full.

BTW, MSE recommend this only for 0% balance/money transfer cards, not for 0% purchases cards:

• The three golden rules
• The five golden rules

In this case we are talking about purchases.

* So seems to be Nationwide:
Interest will not be charged on new purchases if you pay the total balance (excluding anytransactions that are on a 0% promotional rate) shown on your statement by the payment due date. 

grumpy_codger

grumpy_codger said:

Grumpy_chap said:

bestusernameever said:

So I took out a 0% card for a big purchase. I was aware that the interest free period was for purchases in the first 2 months which I was fine with as this was all I got it for. 

So, you took out the card and made a big purchase in the first two months.  This balance is at zero percent.
You are carrying that balance on the card.  You are not paying IN FULL.

bestusernameever said:

However for convenience I made a fairly large purchase that I planned to pay off in full when the statement came through. I was surprised when the statement came through today that there was an interest charge of over £17. 

bestusernameever said:

It was several transactions, including Amazon, guitarguitar and thomann

Then you made some additional purchases while the amount at zero interest remained.
As such, these new purchases incur interest from the date of purchase because you have not cleared the balance IN FULL.

This is what they confirmed in the chat:


New purchases do not benefit from the "up to 56 days" as you have not paid the balance IN FULL and on time.  This is as per the terms & conditions:


...
The only way to gain interest free period on new purchases is if the card balance was cleared IN FULL from the previous statement.
...

Can you quote the relevant bit from the T&C? 
"in full each moth"  is too vague. I can argue that in this case once you don't pay it in full you may be chargede interest indefinitely in the future.

...

I found it myself. Yes, this is true:
https://www.mbna.co.uk/assets/pdfs/terms-and-conditions/general-credit-card-terms-and-conditions.pdf

A4. How interest is worked out
We calculate interest daily based on the total amount you owe. We add together all the daily interest amounts in eachstatement period and add the total to your balance on your statement date.
There are two exceptions to this rule:
Purchases: We do not charge interest on purchases made during your latest statement period if you pay off your full balance (including any balance transfers and money transfers) by the payment due date and you also paid your previous month’s balance in full by the due date
...

CliveOfIndia

bestusernameever said:

I’m still waiting for the statement with the purchase charge on to be processed. I’ve been charged interest on a purchase before I’ve been sent a statement that it was on. 

To be pedantic, you haven't been charged interest, rather interest has been accruing.  Interest accrues on a daily basis from the date of the transaction - that's true of every card.

The interest is waived if you repay the full statement balance that month, by the stated "payment due" date.  Since you didn't clear the whole balance, then the accrued interest becomes payable.

DullGreyGuy

grumpy_codger said:

However, in this particular case the interest allegedly was added even before the OP was given the opportunity to pay the statement balance in full.

No it wasnt, they said the purchase was made after making other purchases within the 60 day interest free period so they knew when making the purchase that they hadn't cleared the balance in full of the prior statement and so should have known there would be no interest free period. This is why you dont mix purchases on a card with a previous 0% balance still sitting there

grumpy_codger

DullGreyGuy said:

grumpy_codger said:

However, in this particular case the interest allegedly was added even before the OP was given the opportunity to pay the statement balance in full.

No it wasnt, they said the purchase was made after making other purchases within the 60 day interest free period so they knew when making the purchase that they hadn't cleared the balance in full of the prior statement and so should have known there would be no interest free period. This is why you dont mix purchases on a card with a previous 0% balance still sitting there

Yes, you were right about 'previous/prior' statement, but, TBF, this isn't the case for all CCc. I don't know any statistics on this, but I mentioned Barclaycard and added Nationwide to the same post above for which this isn't the case.