I have an account with MBNA, and I'm carrying a rather large balance and have been for about 1 year. My interest has been around 11% - varying a bit, but this month it just jumped to 22%. Since I'm carrying a large balance (though I make at least minimum payments on time), do I have a chance for an APR reduction? Prior to 1 year ago, I always paid every month my balance in full, and I have had the account since 1997. And can I do this via letter rather than over the phone? thanks for any advice p.s. what does "PFB'ed" mean?
Did MBNA send you an explanation for the rate increase? Have you been consistent in paying all cc in full each month? You should write to request to the Adverse Action Notice to determine what criteria was used to raise your rate. OTH, if you're attempting to lower your interest rate, you'd have a greater chance at success by telephoning and speaking to a supervisor. If you've received offers, that give you a 3% APR there's no reason why you shouldn't ask MBNA to match it.
Was this carried balance due to purchases, where the rate can typically be changed just on notice to you, or was it a balance transfer in response to an balance transfer offer at a fixed rate until paid?
I've been making at least minimum payments, but not the full amount. The money owed is on cash advances & purchases. thanks again
Typically, the bank is free to raise rates arbitrarily on purchases and cash advances, unless there were some part of the card agreement that guaranteed a fixed rate. Even with a fixed rate, the bank might argue that the consumer's credit quality was not the same as when the original terms were granted. MBNA seems to have a reputation for raising rates on their accounts on increases in credit usage apparent from reviewing consumer credit reports, even in the absence of actual negative TLs. Balance transfers often have terms that are fixed until paid, or fixed until some date. Often these offers specifically spell out the circumstances under which the rates will be raised to some default rate. These terms are more likely to be honored by the bank as long as there are no lates or other defaults showing on your reports. Don't trust your purchase rate to stay fixed, and even if you get good terms on balances on your cards, don't push your luck and let your credit situation appear to degrade. Keep your balance to available credit low, and make sure you have a way out if one of your accounts jacks your rates. All the above assumes you are otherwise managing your financial affairs responsibly, and not just digging yourself into a hole.
If you are revolving a on a lot of credit cards other than MBNA and you are making only minimum payments.. That is most likely the reason your APR was raised.
I'm curious....now that MBNA and BOA have merged, will the policies of MBNA be used over the BOA policies? I have been a happy BOA customer for several years, and have never accepted a MBNA offer because of complaints I have seen here and on other forums. I sure hope BOA prevails with the policies they have been using.
