A lifetime of payments......... (MBNA)

Member Name: hypno06

Product:	MBNA
Date:	08/08/09 (279 review reads)
Rating:

Advantages: When it works it works well

Disadvantages: High APRs if you don't pay off each month.

Over the years, my husband and I have held a fair few credit cards and loans from varying financial institutions.

We took out an MBNA visa credit card to take advantage of a 0% balance transfer promotion, about 8 or 9 years ago, and were given a significant credit balance.

Application back then took place on the internet, and as this was in the days when credit was much easier to come by, it did not matter that we already had a significant amount of debt - the credit was thrown at us.

It all seemed very attractive at the time - 0% interest, plus a payment each month of just £5. MBNA worked then on a "minimum payment" basis of "interest due plus £5". That meant that you were only ever automatically paying £5 off your debt....leaving the bigger balance subject to their higher rates when the offer period came to an end.

As sure as night follows day, the 0% period came to an end, several months after we had taken the card out. The balance had reduced by less than £75 as we had only been paying the required £5 a month, and so when the first month's interest was suddenly added onto the statement, it immediately took us over the credit limit, which caused a charge of £30 or thereabouts to be added, meaning that we owed more than we started with!

Several snotty phonecalls later, and we got the charge reversed, but what we had niaively thought was a good start to our relationship had suddenly given us a wakeup call.

MBNA do give good balance transfer offers. If you have an empty card, or a near empty card, they will give you a further offer, to try and tempt you to move other balances to them. If you keep absolutely on top of the system, they have been one of the best people for balance transfers and stoozing about.

However, if you do find yourself paying interest, which of course a lot of people will do, you can find their rates, even for standard good credit, good payers, can reach the dizzy heights of 34.9%!

Remember, that base rates are the lowest they have been at 0.5% and look set to stay low for a little while yet - but MBNA, and all their other disguises, such as the Virgin Credit Card, are still charging what I would consider to be sub-prime rates which, quite frankly, are disgusting.

How anyone can be expected to clear a debt easily, when they are paying interest of almost 35% is beyond me. No wonder we are hitting problems.

MBNA were quick in the past to give big credit balances, and attractive offers, but once you have been lured into their lair, it can be a very different picture if you do not have your wits about you.

It is not all bad news, if you are savvy in the use of your card - that means, it is not bad news if you can afford to use it for stoozing (taking advantage of 0% offers on your credit card, using the capital to earn a high rate of interest elsewhere), or if you can afford to pay off your card each month (which is what we do), thereby accruing no interest, then MBNA is a reasonable company - everything ticks along nicely.

We have paper statements sent to us in the post, but I also have access online, so I can see current balances, any outstanding transactions that are "in process", which is a very useful thing when you have forgotten that you put petrol in the car at the weekend.....and I can make payments - either the minimum, or any other amount. Payments are credited to the account within 2 working days, which is quicker than many other card providers, so I am more than happy with this.

I make my payments manually, by debit card, on payday. But just in case something goes wrong, and I don't or can't make payment myself, I have a direct debit payment set up for a date close by. This has never presented itself to be a problem, so is a good "back up" for me in case my organisational skills suddenly leave me!

Once I made a payment over the internet, and due to a storm we lost connection after I had pressed "submit" but before I received confirmation of the payment. I therefore had no idea if my payment had been made, and wouldn't know until either money had left my bank account or shown on the MBNA account. I was concerned because, at that time, it was close to the "due date" and I did not want to risk late payment fees.

A quick call to MBNA, however, and they did do the sensible thing which was to allow a couple of days to see if the payment had been processed. If it hadn't, then I was to ring back by a certain date, speak to a certain person, and arrange a debit card payment. They then ensured that no late payment fee was charged, because I had done the sensible thing too in contacting them as soon as I was aware of a potential problem.

On another occasion some years ago now, however, we were late (our own fault) in paying because of an oversight. We received the most persistant phone call campaign you could believe possible! Every few minutes, it seemed, someone called our mobiles and our home phone. My husband had calls at work that he couldn't take but they couldn't get the message that we would make payment as soon as we got home that night. The people we were speaking to were rude, they were arrogant, and they had no respect for their customers at all on this occasion. I do feel sorry, therefore, for anyone who has fallen foul of MBNA and has to deal with this on an ongoing basis.

As I said, when this goes well, it seems to tick along nicely, and in all the years we have had our account, things have gone reasonably well, so I can't complain too much.

I believe that their minimum payment is now "interest plus £10" which is not much better than when we started out - it would take you a lifetime to pay off your debt if you are only making minimum payments, and at 34.9% it is going to hurt in the process. We once worked out that our balance would take over 100 years to pay off (£6000 balance, paying interest plus £5). Quite how that is respsonible lending, really, is quite beyond me. Thankfully we reduced our balance much quicker than that, and now pay it off every month without fail.

I am going to deduct 2 stars - one for the extortionate rates they still charge "ordinary" customers, and one for the rude way they treat anyone who happens to step out of line, either intentional or not.

But three stars for a credit card company - I don't think that is too bad, and the MBNA card stays in our wallets for a little longer.

Summary: Be careful if you are lured in by 0% offers.......