MBNA raise credit card interest rates

cookie1977

Just when people really dont need this MBNA have increased their credit card interest rates from 10.9pc to 16.9pc.

The higher rates mean that someone with a balance of €5,000 owed on their card will face additional payments of €180 a year if they take three years to clear the debt.

A spokesman for MBNA would not say how many customers were impacted by higher interest rates, nor how many of its credit card customers were in arrears.

http://www.independent.ie/business/personal-finance/latest-news/credit-card-firm-hikes-interest-rate-3116134.html

We really need that personal insolvency bill sorted asap.

D1stant

We need a financial regulator that works for people

chris85

I dont think anyone didnt see this coming. MBNA need to be more profitable and credit cards are taking a big hit in the banks and thus a higher rate is charged which takes into account the risk associated with credit cards.

I dont think its good for customers obviously but can understand the need for the rate increase. If they cant increase revenue more the jobs in there which were saved will be at risk again.

coylemj

cookie1977 wrote: »

We really need that personal insolvency bill sorted asap.

Why? So people can go out and spend money they don't have and expect the State to step in and fix it for them when they can't afford to pay?

I can understand your comment in the context of people who find themselves in negative equity because of the crash in the property market but nobody is forcing you to buy stuff on an MBNA credit card and if you don't like their interest rates, shop around for a lower rate or better still, pay your bill in full every month in which case the rate of interest won't matter.

cookie1977

There are people out there who have credit cards and ran up debt because they had to (household items, emergencies etc...). Not everyone was spending like crazy on trivial things. These people didn't want to have to get into debt but they still ended up there. More than likely they also are in negative equity and behind in their mortgages. They're being hit from all sides and with no hope of getting out. At least the personal insolvency bill may offer them some hope of climbing out of the debt.

wmpdd3

If you are having problems paying, write to them and they will freeze the interest and charges, cancel the card and you pay the balance off.

cookie1977

Cheers but I'm not in debt thankfully (well apart from the mortgage )and don't have an MBNA card

KoolKid

Got rid of my MBNA card thank god.
Clearly the customers who are meeting the payments are going to be paying for the ones who arn't & the ones who are settling with less than 50% of their balances.

Solair

Actually, from a credit card company's perspective, the ideal customer is someone who leaves a floating balance i.e. reliably makes minimum payments and continues paying huge interest.

KoolKid

I agree. So its their best customers who are footing the bill for their worst ones.

brinks_18476

You have the option to decline accepting the interest rate hike. It was detailed in the letter sent to MBNA customers. However it means that you cannot use your card and your account is automatically closed when balance is paid off. You still have to meet your minimum monthly repayments.

brinks_18476

wmpdd3 wrote: »

If you are having problems paying, write to them and they will freeze the interest and charges, cancel the card and you pay the balance off.

Will they? Is this really an option? How does this effect a persons credit rating?

KoolKid

I think this option is only available after you are seen to be struggling and missing payments. By the time they freeze interest your credit rating is at rock bottom anyway.

GerardKeating

cookie1977 wrote: »

Just when people really dont need this MBNA have increased their credit card interest rates from 10.9pc to 16.9pc.




http://www.independent.ie/business/personal-finance/latest-news/credit-card-firm-hikes-interest-rate-3116134.html

We really need that personal insolvency bill sorted asap.

I just looked at the MBNA site to use the rates, and they are listed as so

Your standard monthly rates
Standard rates apply to the balance until it is paid off or until further notice.

Rate Type
0.0000% Balance Transfers
0.0000% Cash
0.0000% Card Purchases
0.0000% Money Transfers/Cheques

Wonder if I can hold them to this...