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Member since:22.10.2003
Reviews:69
Members who trust:70
First things first- if you’re thinking of getting a credit card, think again. Have you really weighed up the pros and cons, or do you see it as an easy way to some quick cash? That’s the trap I fell into, about 11 years ago, and I’m still paying for it. When I took out my first credit card I thought I was giving myself a cash injection of £1000 to go travelling, which I’d pay off when I came home. Sure. Right. Durrrrr! But that’s another op- on the foolishness of youth – watch this space! Anyway, after accruing a rather alarming debt on a Barclaycard at the age of 20 I took out an MBNA card as I saw the interest rates were lower, and thought this would save me some cash. Might even get it paid off? Dream on….
MBNA is an ace at luring. They offer sexy low rates of interest, and for the morbidly poor, even boast a free-phone customer services number. There are not many companies you could say that about. Even
if you’re abroad you can call the international operator and ask them to reverse the charges. They ply you with glossy bits of paper, and just in case you didn’t notice last month, they’ll send you the same stuff this month too. Every statement you get will be crammed full of offers for you to spend more of their money. They are sooo generous!!
Every credit card company has bad points, and a few have some good too. Here is summary of WHAT MAKES MBNA REASONABLE IN MY BOOK:
“A+” for customer service. They don’t take too long to answer the phone, and by jiminy you’re not paying anyway.
"A" for Internet access. They provide an uncluttered, matter-of-fact website, which lets monitor your accounts from home. Never had any problems with it, except if you register a new card (say one got nicked), you need to have 101 details on hand to register it.
“A” for statements. Always on time. Never had any incorrect transactions. Factual and mostly free of advertising.
“B-“ for interest rates. They get you in on a low one, but when your grace period ends the classic MasterCard is currently at an average 15.9% APR. So if you’re taking cash out, wear protective clothing.
And here’s WHAT THEY COULD DO BETTER:
“D” for balance transfers. They encourage you to transfer your existing debt to them, and offer you a good APR, say 1.9% (depends on your circumstances). What they don’t explain to you is that it will cost you a lot of money. Currently they charge you 2% on what you transfer, so if you transfer £3000, you pay them £60 for the privilege. Sound fair to you? Hmmm. What is worse, their pamphlets don’t always state this, even in the small print. I think this may be illegal.
“D-“ for annoying phone calls and junk mail. There just seems to be no way to stop this. Every statement comes with loan offers, balance transfer cheques, every month some cretin phones you and speaks to you as though you’ve just landed. They just want your money, and who can blame them. Just don’t fall for it!
“E” for responsible lending. I used to work for the leading store card company in the UK, and had to speak every day to people who had got into irretrievable debt. I had to arrange payment plans for them and advise them what would happen if they didn’t pay (i.e. bad credit rating, no chance of mortgage, court, prison…..the slippery slope.) I quit my job when I realised that it was the bank’s fault, for luring young people in with tempting offers which would strangle them for many many years to come. Working there also taught me a hell of a lot about my own financial situation.
I give MBNA an “E” for responsible lending, because they don’t spend enough time ascertaining whether the debt can be repaid or not. In my own case, I took out my first card with them 9 years ago at the age of about 22, earning £10,000 a year. I now have 2 cards with them and my total credit limit is £16,700. Even if I’d tripled my salary, (which I haven’t, actually I’ve halved it- see my op on TEFL!), that would be a credit limit equal to more than half my salary. If I actually spent this amount it would take me more than 255 years to pay off, assuming I make the minimum payment. In fact the minimum monthly payment on this amount is about £330, which is more than I earn. Luckily, I actually owe 0.00 on my 2 cards and I keep them just in case a really tasty balance transfer comes up…
“F” for Rewards. Don’t be dumb enough to think that any credit card company is going to offer you something without taking money from you somehow. Read the small print.
MBNA are currently offering 6.9% on their platinum MasterCard and 15.9% on their classic MasterCard. They also do visa. They’re not the worst of the bunch but if you go for one: a) make sure you get an interest free period first b) transfer your balance elsewhere once the real rate applies c) calculate what a balance transfer will cost you with their 2% fee. It might not be worth it. d) PAY IT OFF AS SOON AS YOU CAN
You can find them online at www.mbnanetaccess.co.uk
You can read what some angry people have said at www.badcreditcards.org/MBNABank.htm but bear in mind this is American (same co. tho.)
PS I really wish I didn’t have such an intimate relationship with credit cards…..maybe ciao is the only way being acquainted with them can pay….. :o)
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Feb 20th, 2005
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