MBNA Announces Minimum Payment Increases

By Peter Wakeford
Published on 26 Aug 2008
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MBNA Announces Minimum Payment Increases

The provider says that the hike in payments will get more cardholders out of debt sooner.

Providers are increasing their minimum credit card repayments, the Guardian reports.

Customers at Alliance & Leicester, Virgin Money and other firms run by MBNA are set to see their payments rise from the lesser of £5 plus any interest or three percent, to the lesser of £5 plus interest or £25. This means that customers with low amounts of debt will face a five-fold increase in minimum repayments.

MBNA, a US-based credit card provider, is set to roll these changes out later in the year. It defends the change by pointing out that it will bring many people - who might otherwise have paid the £5 minimum each month and stayed in debt for years - out of arrears quicker.

A spokesman for MBNA said: "From a customer's point of view, the change is a good thing as the more debt they pay off, the better, but clearly, if some people can't afford to pay [the new minimum repayment] then they can come to us and we'll try to resolve it."

According to figures from payments association APACS, around 11 percent of British borrowers (3.4 million people) only pay the minimum repayment on their cards. The same body estimates that 20.9 million pay off their card bills in full each month.

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Comments (2)

Any opinions expressed below are solely those held by individual users and are not in any way endorsed by, or representative of those held by Money.co.uk. We accept no responsibility or liability for the accuracy or content of any material submitted and maintain the right to publish, remove or edit it as we see fit.
Mike W
26th Aug 2008 17:28
I think this is a good idea, but only if they do listen & provide decent advice to people who may have trouble paying the higher amounts.

Thanks

Mike
hello
11th Sep 2008 20:16
im going bankrupt owing mbna 78000

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