press releases

Press Release - 02/03/06

MBNA TURNS UP THE HEAT ON BALANCE TRANSFERS WITH APRIL 1 PRICE HIKE

customers of major UK credit card provider to be hammered by hike in balance transfer and cash fees
and rivals likely to follow suit, warns Moneynet

THOUSANDS of credit card holders wanting to transfer higher balances to MBNA will suffer an additional financial penalty from 1 April.

MBNA is to increase its maximum fee for balance transfers from £50 to £75 in an attempt to squeeze card holders who regularly transfer balances.

The company is also pushing up the cost of minimum charge for balance transfers, cheque and cash transactions from 2% to 3%. The new fees will also be rolled out against many of the company’s affinity cards, as well as its own brand plastic.

Now Richard Brown, Moneynet chief executive, warns that where MBNA lead, rival companies may well follow.

“MBNA’s move means significant penalties for the so-called rate tarts wanting to transfer larger sums,” he said.

“Over the past few years borrowers have taken advantage of the benefits of zero interest balance transfer facilities, but there has been a worrying trend in recent times for card firms to impose substantial charges on this popular service.

“Now, with charges continuing to creep up, the balance transfer scenario is not looking like the great value deal it once was,” added Brown.

But it’s not all bad news for card users.

Intelligent Finance, the Halifax owned online operation, has scrapped all its balance transfer charge, which will offer a cushion to those wanting to switch substantial debt.

“That said, both Intelligent Finance and rival Egg are increasing their cash advance charges, raising the stakes from 2 to 2.5%. Millions of users are likely to be affected by these price hikes,” said Brown.