Credit Card Holders Say Low Interest Rate Was Illusory A class action has been brought against credit card issuer MBNA Corporation by consumers alleging that the company was deceptive in charging higher annual percentage rates for cash advances than the promotional rates it had advertised. The class consists of MBNA cardholders who obtained cash advances under the promotional offer and who paid back the cash advances at the same time they paid their credit card bill for purchases. The action claims that MBNA, by denying cardholders the benefits of a promotional offer for a low interest rate on cash advances, acted in bad faith and breached its contract with the cardholders. According to the cardholders, MBNA applies credit card payments to cash advances before payments are applied to purchases. Cardholders with both cash advances and credit card purchases, therefore, would have to pay off the low-APR cash advance first before having their payments apply to the high-APR credit card purchases. The cardholders claim that this policy denies them the benefits of the promotional offer. On March 29, 2001, an appeals court upheld a trial court ruling certifying the class. This case will proceed in the trial court as a class action.
