MBNA & Citibank to increase minimum payment to 4%

kinesin_2

All stoozers: FYI

Your credit card payment just doubled

So far, MBNA, Citibank and Bank of America have announced they are doubling minimum monthly payments on credit card balances from 2% to 4%. Others are expected to follow suit quickly.

Now I not sure if this is going to happen in the UK - but MBNA is worldwide player so I wouldn't be suprised.

martinpike

Even if it happens here, it's a minor issue. We're still coining it.

Smitty

it is a bit of a pain in the a*s. It means the Stooze pot gets reduced twice as fast, and if you have a lot of stoozed CCs offsetting a mortgage it will be harder to pay the minimum payments each month from your wages.

Thefunkygibbons

The £5 that virgin charges is a lot nicer than 4%

On a £25k stooz pot, that is beginning to be quite a bit of money

YorkshireBoy

Thefunkygibbons wrote:

On a £25k stooz pot, that is beginning to be quite a bit of money

Agreed, I'm stoozing in savings accounts and my minimum payments peaked at over £1,300/month earlier this year, on a mixture of 2% & 3% deals. They would have pushed £2K/month had it not been for a couple of MBNA derivatives charging £5 each.

Clariman

Surely this is just in the US ? OK - I guess it could come here but with MBNA only chargin £5 for min monthly payments, going to 4% would probably be more of a leap than their customers could take i.e. they would lose customers. I don't see it happening just yet. I don't know the US market, but think about it .... why would a lender want to increase the min monthly payment ? They wouldn't really. The lower it is, then the more money they make in interest from genuine borrowers. So, I suspect that the motivation to move to 4% may have come from government pressure on lending and risk. i.e. concerns that borrowers will never pay off debts at low min payments.
Clariman