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Card Firm Adds £500 To Bills

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Before I went bust they only wanted 2%. I had about 13 grand on an MBNA card so the £260 payment would now be £650. If they all want 5% a lot of people are going to be looking at over £500 to pay their cards each month.

Up to last week I owed about 5k on a Goldfish credit card.

I rang them up for a settlement figure, and they said that if I paid it off straight away theyd credit me with £500.

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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.

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

http://www.timesonline.co.uk/tol/money/con...icle4321505.ece

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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.

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

Before I went bust they only wanted 2%. I had about 13 grand on an MBNA card so the £260 payment would now be £650. If they all want 5% a lot of people are going to be looking at over £500 to pay their cards each month.

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Up to last week I owed about 5k on a Goldfish credit card.

I rang them up for a settlement figure, and they said that if I paid it off straight away theyd credit me with £500.

Worrying sign that, get the feeling they are all slowly running out of cash... scary stuff

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why would you need a settlement figure for a credit card ?

you just pay of the outstanding balance

flat rate lona maybe you get a rebate because interest was based on original lump sum for duration of the loanst

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Worrying sign that, get the feeling they are all slowly running out of cash... scary stuff

Sadly not. Just last week they let me balance-transfer 7k, no fee, interest-free until mid-December. It was just after I missed a payment on another card also owned by Barclays. Admittedly, the missed payment was only a fiver, and then only by a couple of days. I can also reasonably blame it on them, though the credit record will not reflect that. They even offered the balance transfer unprompted when I called to activate a card. I expect others with a Morgan Stanley Card (currently managed by Goldfish who are in turn owned by Barclays) would probably have had a similar offer.

My main current account is with Barclays who hence know that I certainly don't need credit and will be able to repay the balance before any interest is charged. Goldfish should be able to guess as much if they can't be told, seeing as I left the account unused soon after I went over the limit where the cashback percentage reduces. It was always paid in full.

Credit crunch? I have heard of it ...

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no. i have no debt whatsoever. debit cards are best.

i can imagine pretty soon they will be just forced into just paying back credit balances with no more money available.

then the shit will hit the economic fan. no credit. can you imagine a world with no credit cards. just debit cards ?

it was said the average family has 11 days savings.

so if they lose a job, there go more credit card write offs.

more credit funds are withdrawn.

recession goes deeper.

I could safely say if I croaked it, or if the missus or I both got made redundant, we could comfortably live for 4 years without going into debt. Thats a nice feeling. Dare I say it? Yep, its nicer than owning your own home... Security is all that matters in my opinion.

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lol iam i the only one here with no credit card debt?

no. i have no debt whatsoever. debit cards are best.

i can imagine pretty soon they will be just forced into just paying back credit balances with no more money available.

then the shit will hit the economic fan. no credit. can you imagine a world with no credit cards. just debit cards ?

it was said the average family has 11 days savings.

so if they lose a job, there go more credit card write offs.

more credit funds are withdrawn.

recession goes deeper.

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Forcing credit card borrowers to repay their debt faster is no bad thing (although there's always the risk of forcing them into bankruptcy by so doing).

Debt's a fact of life, but the advent of the credit card turned it into a way of life. Substituting plastic for real money was always a bad idea and now the chickens are really coming home to roost.

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I could safely say if I croaked it, or if the missus or I both got made redundant, we could comfortably live for 4 years without going into debt. Thats a nice feeling. Dare I say it? Yep, its nicer than owning your own home... Security is all that matters in my opinion.

Is that four years with current prices? What happens after four years and you still aren't working?

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Not since the Great Depression has anyone with a reasonable employment history and qualifications been unable to find work for over four years.

On the credit card issue, I suppose the important thing is whether this is a one-off decision by a single lender, or the start of a more systematic trend towards lowering overall credit levels. If it's the latter, that's bearish news indeed.

Edited by The Ayatollah Bugheri

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Not since the Great Depression has anyone with a reasonable employment history and qualifications been unable to find work for over four years.

:lol: Funny you should say that.

Edited by Minos

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lol iam i the only one here with no credit card debt?

I always pay mine off. In fact better than that I am now using an Amex charge card, which really screws the retailers but gives me lots of points or cahsback.

Off course it's not taken everywhere.

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Up to last week I owed about 5k on a Goldfish credit card.

I rang them up for a settlement figure, and they said that if I paid it off straight away theyd credit me with £500.

Oh boy, do you think that will work with my 11k interest free balance transfer?

Do none of you lot Stooze?

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Up to last week I owed about 5k on a Goldfish credit card.

I rang them up for a settlement figure, and they said that if I paid it off straight away theyd credit me with £500.

!!!!!!!

Oh boy...they must be desperate to get rid of people.

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Forcing credit card borrowers to repay their debt faster is no bad thing (although there's always the risk of forcing them into bankruptcy by so doing).

the medicine might be very bitter, but being cured of debt will be a very positive outcome.

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It appears that the credit economy is coming to an end, or is it?

My slightly gullible and naive mum went into barclays last week to change the address of her account. She came out with a credit card and a premium bank account. she doesn't have much money, has a bad credit history and is approaching retirement.

I'm currently trying to pursuade her to cancel both before her 14 days to change her mind expires. After a long chat it appears to be peer pressure that caused her to get the credit card. Her dum and gobby work friend had been ridiculing her debit card, saying "that's what students have!"

There are plenty of punters and salepeople still out there who are up for debt

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Her dum and gobby work friend had been ridiculing her debit card, saying "that's what students have!"

What i dont understand is why anyone would make any comment about such things. I have no idea about what debit/credit cards any of my friends and collegues have or use. If anyone ever comes in complaining about their bank then I will pass on my recommendations though.

But that some people aparently put some cudos on what credit/debit card someone has or uses is just quite frankly bizarre. Some people take things on a far too superficial level. Who is richer? Someone with a £5000 limit on their credit card or someone with £1000 in their bank account?! I know which I would rather have.

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Its definately a good thing.

Take a nominal balance of £5000 at the average new borrower rate of 16.9% APR (existing borrowers are often on MUCH higher rates without realising, which makes paying off the debt quickly even more important)

At their old terms of greater of 2.25% or £5, paying just the minimum the figures work out as:

Repayment Time 32 years 2 months

Total Interest £6,413.95

Total Payment £11,413.95

At the new level of 5% or £25 it's:

Repayment Time 7 years

Total Interest £1,565.57

Total Payment £6,565.57

It is good news for people and will save them a lot of money long term.

But of course people only look short term.

Edit: for apr

Edited by rickybruce

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MBNA are deep in the mire. The vast majority of their lending is funded by securitisation. There is every likelihood that the market for securitised credit card debt will implode even more quickly than the one for MBSs once arrears start rising.

And rise they will: rapidly. Apart from the declining economy, over the last few years, a lot of credit card debts that would otherwise have gone unpaid have been settled by people MEWing. It doesn't take a rocket scientist to work out what's going to happen now that MEWing isn't an option...

EDIT: typos

Edited by Arth

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