MBNA Credit Card - More interest than min payment?

mbna-customer

Hi all

Quick one for the board - i have an MBNA credit card, which ive been a naughty person with over the years and maxed it out a few years ago.

I wouldnt say im struggling for money, as i can and have met the min payments for over 12 months without fail - but as they were originally the lowest interest lender, my focus has been on other areas.

Now, this month i recieve a statement that says:

Bal prev statement: 5310.03
Payment rc'd: 137.25 CR
Est interest next statement: 127.80
New balance 5313.74
Min payment next 145.96

All well and good - apart from the fact that my opening balance is less than the closing balance! Ive paid what they asked for, and i realise that it doesnt go away with just paying the minimum - but its gone UP!

Now, i spoke to cs who couldnt help, and tried to get me to sign up with a famous internet loan broker (im sure you'll guess) - when i said i didnt want that, and i wasnt going to earn them commission by trying to get a loan and hitting my credit report, she got snotty and transferred me to the "problems with payments" team!

The woman there couldnt ' wouldnt help as i'm not in arears and just gave me the loyalty team number - who only work in normal working hours (i wonder how many of you cant make calls at work - and THEM for that matter..)

Then i spotted something in the T+C's about the minimum payment; its calculated on the estimated interest nexst month + £5 - i got the second woman to confirm this.

So i asked her what my LAST statement estimated interest was. She said 140.96 - seem familiar? yes - becuase thats what they DID charge me. So, why did they take a DD payment for £137.25? When there own rules state £140.96 + £5 - which would have seen my balance reduce.

Im going to call them tomorrow - but would love to hear from anyone who has had this happen / has knowledge beyond mine of the CCA / Responsible lending policies.

Oh, and as a parting gift - they told me my interest was 35% - how nice..

Any advice guys?

cheers.

vbrindle

What a nasty bunch of gits.

My interest was about 16% and they've nearly doubled it to 28.9% for no reason.

Well I've sent them a letter asking them how they can justify such a sharp increase with the last line saying "I look forward to your reply".

I'll post here when/if I get a reply.

I'm not sure what you can do. Can you not balance transfer somewhere else? I know I'm a bit stuck at the moment, my parents seem to get 0% balance transfer cheques every week but no such luck for me.

I personally don't pay by direct debit, I pay by a single standing order payment so I can choose what to pay every month.

As for these guys, don't pay the minimum amount as they always make it a low figure. I'd pay at least double the interest, this is what my capital one's minimum payment is.

Basically they don't want you to ever pay it back and they are probably the worst for it in my opinion.

speedbird1973

There's 1001 "MBNA made my interest 34.9%" posts on here! (including one from me lol)

It IS reversable for many of us!

YorkshireBoy

Next month's estimated interest figure is based on them receiving the minimum payment on the due date, and there being no further transactions placed on the account (you haven't been spending on it as well have you?). As you have (have always had?) a DD in place, then this figure should be accurate.

The reason your balance is increasing is probably due to the new "35%" rate kicking in mid-month...very recently?

The minimum is just that though, a minimum. You can, and should, pay more...at least until you can shift the debt elsewhere.

Expect to see (or have had and missed?) a change to your minimum payment now that your rate is so high. It's probably be going to the LESSER of 5% of the balance or interest + fees/charges + PPI + £5.

mbna-customer

thanks all..

yourskireboy - i havent spent anything on the card for over 12 months - and the DD is variable - so i think theyve cocked up here - we'll see what they have to say tomorrow when they're IN!

i'll post there responses for all to see..

i like vbrindle's reply - basically s/order it for as much as i can comfortably afford, then i'll see it drop - but i am gonna try and get the rate reduced..

cheers

Bismarck

I think MBNA are smelling blood...it's up to you to disappoint them....

DestroyingAngel_2

If you make additional payments, on top of the DD set up, you'll be paying off the balance faster and therefore paying less interest on what you owe. Go online at www.mbna.co.uk, and make as many payments as you like, it's the fastest way to get payments to clear - if you pay before 5pm, it only takes 2 working days for the payment to clear. If after 5, give it 3 working days. Paying in at your bank is a pain, allow 4-5 working days, and if your bank is tardy and the payment doesn't get in on time, YOU'LL be the one to pay for that mistake!

The "Minimum Amount DD" takes the minimum payment as calculated by the system. You can always raise it to a "Fixed Amount DD", as long as you know it's going to cover the minimum. If you make more spends on the card, make sure you make additional payments so that you meet the minimum payment requirements, otherwise you're looking at a late fee charge plus more interest. Or, if you're one of the lucky ones who manage their finances well, go for the "Full Amount DD", which pays off the balance in full each month, leaving you with 0 interest and a big smile on your face. :j

The maximum APR on MBNA cards is 34.9%, it doesn't go as high as 35%. Obviously, if you're a good customer who pays in full and on time every month, then you'll get the good standard APR rates. If you're always late or miss payments, then you're going to get higher APRs, to jolt you into making more payments to clear the balance faster. Traditional time-tested "carrot-and-donkey" and "stick-and-donkey" approach.

speedbird1973

That's not the case destroying angel.

I suspect long term balances on the card are the trigger. I never missed a payment, or was late. However I paid £200 pcm and the minimum was £160, no not making big inroads into a 9k debt (I never paid much attention to interest rates). I got my 34.9% letter and because of my good history managed to shuffle everything around, get new cards and my biggest debt is at 5.8%. It's not just bad payers, it's big debtors that are getting dealt with in this way!

Needless to say MBNA did me a favour!