MBNA new interest rate

clint_silver

MBNA just sent me a letter. New credi card rate jumping from 14.9 to 18.9%.

I can accept this and keep using the credit card.

Or

theyll allow me to refuse to accept the new interest rate, the 14.9% will remain, but I will be unable to use the credit card. In effect turning the balance into a loan which will be subject to all credit card rates and terms, except I just cant use it.

everyone should have got one. have until mid-november. not sure how to think about this. If you clear your balance, its all the same. Ive a hefty one though that Ive been trying to clear for the last year. For me it makes sense to refuse.

Zab

Yeah, unless you really need to use that credit card in particular than you'd be mad to accept the new rate if you have an outstanding balance.

TheDriver

if you have a hefty balance that you are obviously stuggling to clear then you don't need a credit card to spend more? REfuse and pay off the loan ASAP

leeroybrown

It definitely makes sense to refuse. Adding an extra 4% to your interest rate makes zero sense if you have a large balance. If you refuse you just need to continue paying off the balance and the account will automatically be closed when it reaches zero. Unless you absolutely need the card I'd suggest living without one until you've paid down the entire balance.

clint_silver

TheDriver wrote: »

if you have a hefty balance that you are obviously stuggling to clear then you don't need a credit card to spend more? REfuse and pay off the loan ASAP

Its coming down as fast as it possibly can which is very very slow. It got loaded a couple of years ago and since then I only use it for essentials like flights or if Im badly stuck for an essential online purchases when I need something and its cheaper to get online. So for every 10er I take off it per year, probably another 5 goes on. So its coming down, just slowly. But this post isnt about credit card debt, to clear it ASAP is a no-brainer. This post is about the mbna thing of closing the credit card for use if you dont accept the interest rate.

Heres the the thing. Lets say the bill is 3k at 14.9. If I dont refuse, the interest rate goes to 18.9, I may as well get a loan for around 11%
http://www.bonkers.ie/compare-loans/
and clear it. now my balance is 0 so it doesnt matter what the rate is.

If I do refuse it, Im stuck with a balance at 14.9, No credit card, I get the 11% loan, clear the debt but now Ive no credit card. I rang mbna, they'll close the account when the debt is cleared.

the thing to do anyway is get that 11% loan.

keithclancy

clint_silver wrote: »

Its coming down as fast as it possibly can which is very very slow. It got loaded a couple of years ago and since then I only use it for essentials like flights or if Im badly stuck for an essential online purchases when I need something and its cheaper to get online. So for every 10er I take off it per year, probably another 5 goes on. So its coming down, just slowly. But this post isnt about credit card debt, to clear it ASAP is a no-brainer. This post is about the mbna thing of closing the credit card for use if you dont accept the interest rate.

Heres the the thing. Lets say the bill is 3k at 14.9. If I dont refuse, the interest rate goes to 18.9, I may as well get a loan for around 11%
http://www.bonkers.ie/compare-loans/
and clear it. now my balance is 0 so it doesnt matter what the rate is.

If I do refuse it, Im stuck with a balance at 14.9, No credit card, I get the 11% loan, clear the debt but now Ive no credit card. I rang mbna, they'll close the account when the debt is cleared.

the thing to do anyway is get that 11% loan.

Way to do it for free would just be to transfer it to a Card with 6 months free on Balance Transfers.

http://creditcard.ie/find_card/card_type.html?id=16

E.G.
Permanent TSB ICE Visa Credit Card
Balance Transfer Rate 0% Balance Transfer Period 6 Months

You could do that twice and that would give you 1 year to clear the balance without getting raped on the Interest.

If you have the balance on the card though that you cannot clear, its probably better to cut up the card and not use it anymore anyway.

If you don't pay it off in the 6 months / 1 year then you're no worse off than you were in the first place, unless you run up more debt that is.

dudara

Moved to Banking & Insurance & Pensions

dudara