2005-10-05

Money: MBNA Secretive New Credit Card Charges

Just what is credit card company MBNA up to? It has introduced annual fees for some of its customers, but refuses to offer any explanation. MBNA appears to be penalising customers who clear the outstanding balance each month to escape paying interest... Fees of up to 25_GBP will be charged, it is believed, from 2005-11. But bizarrely, the whole issue is covered in a veil of secrecy. When asked for an explanation, spokesman Mr.Paul Lawler would say only:
'This is a matter between ourselves and our customers.'
He did volunteer the information that 'a small number' were involved, but would not say how many or even what percentage would be affected. Would the company be changing the terms and conditions affecting its cards? No changes were planned, said Mr.Lawler, adding that fees were already charged on some MBNA cards. Was it true that customers who paid their bills in full would be affected by the new fees?
'We are not commenting on the specific details of what we are doing,' was the emphatic reply.
Mr.Daniel Newbolt at Moneyfacts, the country's leading financial data supplier, was not impressed. He said the introduction of the annual fee was a backward step.
'Annual fees on cards have pretty well "died the death". 'I would certainly not apply for a card with an annual fee unless it was offering some spectacular extras, because there are so many alternatives without fees.' he said. 'This is an opportunity to get back money from existing customers who are paying off their bills in full. 'If you introduce a new fee you are banking on them not moving, because existing customers are likely to stay where they are. 'I would probably move.'
For some time, credit card companies have been quietly cutting back on 0 per cent balance transfer deals or imposing a fee of about 2 per cent of any sums switched to a new card. This is meant to deter so-called 'rate tarts' –- customers who switch each time their 0 per cent interest offer comes to an end. MBNA's new fee sends out a different message, this time to customers who have the good sense not to waste money on monthly interest payments. The message is: There is no such thing as a free credit card. Happily, not all cards are the same. And if you are not carrying a debt on your card, switching should be a dawdle. 'MBNA's secret card fees', Simon Moon, This is Money, 2005-10-05

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