UPDATED 2002 and 2006:
I won't repeat the detail of the many (100's?) of cards that MBNA issue (oh, ok, there are some at the bottom). They not only issue with their own name but 'affinity' cards for seemingly any organisation, where a small 'cut' goes to the organisation.
The point of this op is to praise their customer services and the 'flexibility' (no pun intended) of their cards. I've held quite a few since MBNA came to Chester (early 90's?) and have always been satisfied at their low regular rates but especially their 'offer' rates. I use their cards to access cheap money. The more you borrow the more they offer. e.g. borrow, say £5k at 1.9% for 6 months, and then pay off in full before the rates rise. Their computer seems to say 'hey, this ones getting away. Lets
dangle fresh worms' The week after paying off a balance like this and I get calls offering fresh offers of cheap money for a further period. Who am I to refuse when I can earn over 5% on money borrowed at 1.9%? The above has happened repeatedly for years, each time the credit limit being raised. So, now have two of their cards, each with a limit over £10k, which I rotate the offers on. Effectively I have borrowed £10k from them for the last 6 years at an average rate of 1.9%.
What to do with this cheap borrowing? Well, I am not at all keen on personal debt so I NEVER spend such borrowings. Instead, put it somewhere where it can generate more money that it costs. As an average gal I have a mortgage, so I chose one with an offset savings account into which I can drop such funds at will (see my review of Egg for the use of offset savings accounts for tax free savings). My mortgage is currently 5.2% so I SAVE that mount off my mortgage for any funds in the offset. So, £10k at 1.9%+0.5% cost saved at 5.2% effective gives net profit of 2.8% for no risk, i.e. £280. This may be small beer to many but to me the one hour per year effort involved makes it worth the return. Obviously you can (and I do) repeat the same for as many cards as you can (in 2004 I carried £50k at 0% for the year, generating ~£2000).
Well, if I was working for them I'd want to put a stop to people like me but in the meantime I'll carry on.
Where does the money come from? Well, the whole point of MBNA having offers is to entice you into using their cards. They then either make money off you via you forgetting to clear the balance and paying full whack interest or if you buy things with card then the transaction fees. The short term offer is effectively funded out of an advertising/loyalty budget; the number of people caught in the net and the profit generated far outweighs the cost (otherwise they would not persist in doing it). People 'stoozing' like me are a minority.
MBNA have introduced a 1.5% fee for balance transfers. This makes their cheap money offers less so. However, the BT fee has a cap of £50 so if you are transferring as sizeable sum then the effective additional interest is diminshed to, say, 0.5%, making the transaction still worthwhile.
If you want to use the cards as regular CC then I cannot fault them except if you wanted to collect some sort of points. And the customer services is excellent, both via freephone, email and the website (where you can do balance transfers to virtually any account e.g. current account, household bills as well as other CC).
If you want an affinity card with a good rate I recommend the Breakthrough card, which contributes to breast cancer research. The one I've got has an introductory rate of 1.9% for 6 months with a regular retail rate of 17.9%. As said earlier, MBNA have zillions of affinity cards like this one, some of which give points e.g. the Amazon card which gives points that can be spent at Amazon.co.uk.
Postscript:
The web service is called MBNA NetAccess (http://www.mbnanetaccess.co.uk/). It allows you to:
- Get up-to-date information on all your MBNA credit card accounts
- Transfer balances from other credit/store cards
- Pay other bills with your MBNA credit card
- Track transactions and payments
- Request address changes
- Review recent statements
- download statements into MS Money (no more pesky statement reconciliation!)
- view current BT interest rate and termination date
- change your PIN
Online applications can be made via http://www.mbna.com/Europe/credit_index.html
by (74%):
23.02.2003 23:36
I found these details very interesting - thanks for the advice!
04.05.2002 14:45
Obviously it is not that easy to get a credit card. You could add what proof they need of who you are. How they check your credit standing. What do they set your credit to as no one will give you unlimited credit to begin with. Can you get protection against unemployment or sickness? Lots more really. I see you have not written much so well done for joining and for writing on such a difficult subject but I do agree you could have given more information on the card itself! Wayne
04.05.2002 14:28
hi good op. but if you want a v helpful you needed to write more. let me know when you have and i will ahppily re-rate it c ya, dave