If you have an MBNA credit card and you only make the minimum payments, you are in for a shock. In particular, a “payment shock.” Since you have your bills this increase, dramatically. From 1 April, MBNA will pay the minimum amount each month can be 1% increase in debt on the map above to add interest and fees.
This is not an April Fool’s joke for MBNA five million customers. As The Guardian reported this week, it means someone could with £ 2,500 of debt on their card whose interest rate is a typical 16.9% APR, your monthly payments will rise from 37 till 57 pounds to see. (You can check how your own draft law is concerned with MBNA online calculator.)
This system of payments has already been to new customers since September 2009, but now it will apply to existing customers as well.
Good news or bad news for customers in debt?
Obviously, given the short term to extra money for a monthly bill is a bitter blow for many customers to find in debt. The larger the debt, the more you will have to find extra money in every month. But in the long term, it should save MBNA customers money as you pay off your debt faster, which means paying less in interest.
It makes more in debt on a card MBNA less affordable – which will hopefully deter some borrowers from borrowing more than they can afford. Of course, this could be good lesson in wisdom too late for many. And in this economic climate everyone is not required in the position to find extra money.
If you find yourself struggling to deal with your debt, do not despair. Join our free help dealing with debt and get advice from other group members lovemoney.com, or use the free debt advice available.
Warning for all other the minimum payments
Even if you do not have a MBNA credit card, this should come as a wake-up call. The fact is that your credit card company has the right to change its minimum payments system at any time – if you pay only the minimum so regularly, you are prone to sudden hikes in your payments. It is also bad news for stoozers.
What is a stoozer?
Many of the cards are MBNA issues cards free of interest. For example, the MBNA Platinum Visa Card 16 Month one of the best cards on the market, offering 16 months interest free credit. If your MBNA credit card is interest free, so that the minimum payments during the 0% period is a very savvy thing to do. As long as you pay off the balance in full before the grace period expires, your interest calculation will remain at zero.
If you apply for a balance transfer credit card, make sure you follow these top tips. You could even choose to change the extra money that you have assigned to your credit card billing and interest on a savings account and share your money. This practice is known stoozing and can net you a tidy sum.
For stoozers course, this step by MBNA a terrible shock. It means to have more of your money to your credit card statement will assign each month, rather than your savings account. Boo hiss!
The best cards 0%
If you make only minimum payments on your credit card, it is absolutely essential to provide the best 0% card on the market. Why?
* If you are in debt, switching your balance to a 0% card means that – instead of a large part of your monthly payment towards the interest and fees per month – 100% of your payment will actually pay off your debts. It can definitely pay 15 or more from a few thousand pounds of debt on a regular credit card charging 16% APR if you only make the minimum payments. If a 0% card you are out of debt much faster than every penny you pay for the size of your debt reduced.
* If you make a stoozer the minimum payments and get to the end of the current deal, are now a good time to switch. Barclaycard has just passed the longest 0% balance transfer card that we have ever seen here, brought in lovemoney.com. Be 0% lasts for a whopping 17 months.
Tell us about your experience MBNA
We know that there are many lovemoney.com readers who simply hate MBNA because of the way it treats its customers. It was amended by the Office of Fair Trading and which has been criticized? In the past, and we have heard terrible stories about customer service.
The expansion of the minimum-payment system, MBNA said it is his critics to listen and act more responsibly. What do you think? We would appreciate your comments using the box below!