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Huge Hike In Monthly Rates From Card Provider Mbna....

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http://business.timesonline.co.uk/tol/busi...icle4321505.ece

MBNA, one of Britain’s two biggest credit-card providers, is demanding bigger payments in the latest sign that the rates squeeze is spreading.

The firm, which is behind Alliance & Leicester and Virgin Money cards, is raising its minimum monthly repayment from 3% to 5% from September.

The increase will add £552 to yearly credit-card bills for borrowers with the average £2,300 balance, or £46 a month.

MBNA raised its minimum rate from 2.25% to 3% last month.

The latest move comes as card companies also raise annual rates for existing customers — often as they come to the end of 0% balance-transfer periods.

Nearly a third of credit card holders have had their rates hiked during the credit crunch, according to research conducted by Moneysupermarket.

About 14% of MBNA customers have suffered rate increases in the past year. Some customers are now paying as much as 30% — however, MBNA refused to say how many pay this rate.

Egg, which made headlines earlier this year after a cull of its cardholder base, has raised rates for 11% of customers.

One cardholder, Mark Westgage, 42, an IT manager from Great Yarmouth, Norfolk, was told by MBNA this year his rate would rise by 10% from 14.9% to 24.9% when his 0% period ended. He said: “I was so displeased I transferred my balance to another card.”

MBNA said not all customers would pay the 5% repayment rate. However, it declined to say how many would be affected. .

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MBNA, one of Britain’s two biggest credit-card providers, is demanding bigger payments in the latest sign that the rates squeeze is spreading.

The firm, which is behind Alliance & Leicester and Virgin Money cards, is raising its minimum monthly repayment from 3% to 5% from September.

The increase will add £552 to yearly credit-card bills for borrowers with the average £2,300 balance, or £46 a month.

The increase will add £2760 to to yearly credit-card bills for borrowers with a £11,500 balance, or £230 a month.

One cardholder, Mark Westgage, 42, an IT manager from Great Yarmouth, Norfolk, was told by MBNA this year his rate would rise by 10% from 14.9% to 24.9% when his 0% period ended.

An increase of about 65% on his post-teaser rate.

Edited by Timm

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This is VERY significant. This is the next phase of the credit crunch.

This will absolutely KILL people.

Head over to the money saving expert debt board to see some evidence of this.

SUPER DUPER.

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You would have thought in the current climate these companies would be wanting to get the debts down of people and have a higher minimum repayment rate of 5% I would have thought closer to 10% would be better.

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Guest KingCharles1st

Having been on the receiving end of credit card companies and got the scars to prove it- all I can say is-

******!!

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Guest KingCharles1st

Lets think about this for a moment-

the individual is already defaulting on the mortgage-

the card balance is a SECOND CHARGE on the property- yet there is NOT enough equity to even pay off the first charge.

I'm telling you now- the pain from this is going to be INTENSE- and dripping with blood.

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I have an MBNA Credit Card (Virgin brand) - I took it out 2 years ago or so for purpose of a 0% balance transfer offer.

I cleared off the balance within the 0% interest free window and continued to use the card reasonably frequently - always paying off the balance within the interest free period and never exceeding my limit etc.

However, two months ago, the company contacted me to advise that they were cutting my limit "following a review of my account" :o

Suffice to say, the card has been cut up and will not be used again .......

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Was great keeping that debt lingering for as long as possible and making as much interest as possible...now the tables have changed, better get it back quick or it could go bad. :o

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My credit card bill arrived too late to pay it on time last month. It may just be a Post office screw up, but think how much money a big Card company could make on late payment fees if it just 'forgot' to send out it's bills on time for even a month.

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pretty soon there wont be any credit. just debit cards. cash only. game over.

the banks will try and recoup as much of their losses as they can by ripping off existing customers who can pay. (same as the government will increase taxes for people who have got money).

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the banks will try and recoup as much of their losses as they can by ripping off existing customers who can pay. (same as the government will increase taxes for people who have got money).

Only if you let them. :lol:

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the banks will try and recoup as much of their losses as they can by ripping off existing customers who can pay. (same as the government will increase taxes for people who have got money).

as long as they can still afford to bother or pay. inflation caused rapid unemployment will soon settle the game. sooner rather than later methinks.

hungry kids or credit card bill.?

wu decide.

once those credit creating fart pots get a load of those choice credit card defaults that market will go for a burton like most lending.

allowing me and the NWC to come in and be 35% pcm loan sharks to the middle classes.

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http://business.timesonline.co.uk/tol/busi...icle4321505.ece

MBNA, one of Britain’s two biggest credit-card providers, is demanding bigger payments in the latest sign that the rates squeeze is spreading.

The firm, which is behind Alliance & Leicester and Virgin Money cards, is raising its minimum monthly repayment from 3% to 5% from September.

The increase will add £552 to yearly credit-card bills for borrowers with the average £2,300 balance, or £46 a month.

MBNA raised its minimum rate from 2.25% to 3% last month.

The latest move comes as card companies also raise annual rates for existing customers — often as they come to the end of 0% balance-transfer periods.

Nearly a third of credit card holders have had their rates hiked during the credit crunch, according to research conducted by Moneysupermarket.

About 14% of MBNA customers have suffered rate increases in the past year. Some customers are now paying as much as 30% — however, MBNA refused to say how many pay this rate.

Egg, which made headlines earlier this year after a cull of its cardholder base, has raised rates for 11% of customers.

One cardholder, Mark Westgage, 42, an IT manager from Great Yarmouth, Norfolk, was told by MBNA this year his rate would rise by 10% from 14.9% to 24.9% when his 0% period ended. He said: “I was so displeased I transferred my balance to another card.”

MBNA said not all customers would pay the 5% repayment rate. However, it declined to say how many would be affected. .

I had my letter this morning. My balance is, however, 0.

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Guest sillybear2
Suffice to say, the card has been cut up and will not be used again .......

Cancel it too, otherwise it will linger on your credit record.

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Informative thread - I wondered what was going on

Now I'm realising they must have had a major review of their accounts forced on them due to current banking debacle

I have a balance on an MBNA card at 0% for 1 more month (transferred from another card for 2% fee last year)

They suddenly changed my monthly payment amount without informing me to a new lower minimum amount

I phoned them & they told me they have reviewed all the accounts and reset the minimum monthly repayments - The way he explained it I think he was saying this was done to ensure all customers would be paying off some of the loan each month not just a basic minimum monthly payment which would never clear the loan

In my case I was already doing that and their system allocated me a reduced monthly payment!

Also I had an old dormant account with them which they seem to have closed in the last few days as it appeared as a change on my experian report

It looks like they've needed a full and urgent reveiw of their accounts!

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If they raise the interest rates then they have to raise the minimum payment, or else the payment won't even cover the interest which is added each month and it'll soon spiral out of control. This is as much to protect the borrower as the lender (I say this after the recent press about people not reading their meters when they get an estimated utility bill and complain they owe £1,000s after a year or two).

Some people should be made to take an IQ test when they take out a loan or request a credit card, if they fail then they don't get the money :blink:

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Some people should be made to take an IQ test when they take out a loan or request a credit card, if they fail then they don't get the money :blink:

No, if they pass they don't get the money.

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