Commandment #11: Thou Shalt not use MBNA AmericaApr 15 '05 (Updated May 04 '05) Write an essay on this topic.
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The Bottom Line MBNA America is a shameful business that goes out of its way to screw its customers and make an easy buck. Destroy your MBNA credit cards now!
Like many people, I have a love/hate relationship with the small, rectangular pieces of plastic that fill the many spaces in my wallet. Credit cards can be a godsend when you’re in a bind and need a way to pay for a purchase. They can also help when you need a large sum of cash by providing a means to obtain a cash advance at a financial institution. Further, credit cards are often needed to perform many transactions when you travel, like checking in to a hotel, renting a car, etc., etc. But credit cards can also prove to be a real pain in the derriere. The interest rates, if allowed to climb, can add so much to your balance that it could take many decades to pay off the card completely. There are also hidden charges tacked on from time to time and your credit cards can sometimes be subjected to periodic reviews- a situation where the credit card issuer reassesses your credit history and raises your rate higher and/or lowers your limit. These hidden costs, we are told, are the price we must pay for the convenience that only a credit card can offer. Hundreds of banks issue credit cards and I have had the misfortune of dealing with some bad ones over the years. By far my least- favorite of all is MBNA America, a company run by a gang of evil thugs secretly conspiring to suck every last penny out of consumer’s bank accounts. Who is MBNA?: If you have any experience with credit cards, you have likely already heard of MBNA America. It is the largest independent issuer of credit cards in the world, with offices in several countries and more than 28,000 employees. Besides credit cards, MBNA has expanded its financial offerings to include insurance, consumer loans, and other products. Offices are located in several countries, and the international headquarters can be found in Wilmington, Delaware. MBNA is big, and it has helped re-define the credit card business with its marketing strategies and its fairly easy to obtain lines of credit. It seems like just another credit card issuer on the surface, but if you have experienced MBNA firsthand, you will likely have strong opinions about this company, particularly if you’re one of the millions of customers who have had some type of trouble with this bank. Let’s take a look at some of the many problems I have encountered during my six- year relationship with MBNA America: Unethical Practices, Part 1- Over Limit Fees: When I first came to MBNA America, I was lured in by an offer to transfer other credit card balances at a low, “teaser” interest rate that was good for six months. There was no annual fee, so it seemed like a good place to open up an account. But I quickly learned that MBNA gets a large share of its income from other fees and it is often deceptive in the way it charges these fees. One extra charge is the over the limit fee. When I transferred my balances to MBNA, the company deliberately (I have no proof, but I strongly feel this way) set my credit limit just a little bit above the transferred balance. This left almost no room for making additional charges. It also meant that, if the balance was high enough, the interest charges alone could result in my account going over its limit. Sure enough, this is exactly what happened. I ended up paying an extra $29 fee for going over the limit without ever making a charge. Unethical Practices, Part 2- Late Fees: Another unethical practice at MBNA is the addition of late fees to your monthly bill. The way it works, MBNA bases this fee on the day they receive your letter, not the day it is postmarked. This means that slow mail or living far from the mailing center can cause your payment to be received late. Again, this will result in a $29 (approx.- it can vary) fee added to your account. Unethical Practices, Part 3- Increasing Interest Rates: If the fees weren’t bad enough, MBNA also subjects your account and credit rating to periodic reviews. If your credit rating drops, they will penalize you by increasing your interest rate, sometimes by several points all at once. They have done this a couple of times to me, even though I had made all of my payments in a timely manner. When I inquired about this, they admitted that my credit rating was ok, but they said they had a new policy whereby any card holder whose balance was near its limit was considered high risk and therefore could have his/her interest rate increased. Unethical Practices, Part 4- Decreasing Credit Limits: Always looking for a way to screw its cardholders, MBNA also has a practice of lowering credit limits if it sees anything “suspicious” in your credit file. This can be almost anything. I have called and asked about this and they cannot provide a straight answer as to what is considered suspicious and what is not. Again, this can happen even if you have faithfully been making your payments on time. In fact, it often happens when you have made a very large payment on your account and reduced the balance well below the limit. This happened to me once when I had paid a large sum of money to reduce my balance. I wanted to do this in order to give myself a good safety margin with several thousand dollars in open credit. A short time later, MBNA penalized me by lowering my credit limit back down within a couple hundred dollars of my balance. One would think the payment of several thousand dollars all at once would be welcome by MBNA and would increase your standing with them. But often the opposite is true, as this action proved. Unethical Practices, Part 5- Dishonest Customer Service: To top it all off, I have had several instances where MBNA has lied to me when talking to a customer service rep on the phone. Remember the over the limit fees I mentioned a few paragraphs back? Well, I can distinctly remember talking to an MBNA rep one day and specifically asking him if a person’s account could possibly be charged an over the limit fee solely because of finance charges. He assured me this would not happen. So, I mailed in the minimum payment and felt secure that my account would be free from extra charges. I knew the finance charges were going to put me over my limit, but the guy at MBNA said this was not grounds for an over limit fee because it wasn’t the result of card usage. Well, when I got my statement, the over limit fee was there. I angrily called MBNA and told them what had happened. Rather than admit the mistake and reverse the charges, they insisted that this was the way it works. “But this is unethical”, I told them. “A customer shouldn’t be charged an over the limit fee if interest makes the balance exceed its limit. And if this is how it works, then the minimum payment should be increased or some type of warning posted on the monthly invoice”. The person didn’t care and to make matters worse, she said she could find no record that another MBNA rep told me that finance charges would not result in an over the limit fee. I promptly closed my account at the end of this conversation. Final Thoughts: MBNA America is a very large business that has been raking in the big bucks from consumers for several years now. The initial days with MBNA are often happy and carefree. But once they find something wrong, they will continue to come at you with more fees and more interest, sometimes reaching the point where the card is so costly it can end up costing the consumer several times the initial purchase or transfer balance amount. I have used many credit cards, including cards issued by American Express, Discover, Sun Trust Bank, Chase Manhattan, Citigroup, Bank of America, and even store cards like Sears, J.C. Penney, and others. They all have their faults, but none of them are as consistently greedy and unethical as MBNA America. I have used MBNA for about six years, but I have canceled both of my accounts during the past two years. In the early days, MBNA seemed like an ok place. They gave me a good offer to transfer my balances and there was no reason to suspect anything unethical was going to take place. But once one thing bad happened, it snowballed into more and more bad things. The last straw came when they lied to me about the over the limit fees. I was shocked that a company of this size would not reverse a $29 fee to keep a customer happy. One of their own reps misled me, and yet they were unwilling to accept any blame. Then, they increased my interest rate to a staggering level of 25.74%!!! I inquired about this, and they said it was because my balance was too close to its limit. What a crock! I had made all of my payments on time and my credit rating was good. There was no reason to increase my rate to this level. It had previously been about 18.5%, so this increase amounted to financial robbery. This was an increase of more than seven percentage points just because I was close to my limit. I couldn’t understand what would make a company treat its customers in this manner. And talking to the company personnel got me nowhere fast. The reps have carefully scripted statements to say when you talk to them, and they are ready with an excuse no matter what the question. To give you an example of what life with MBNA is like, suppose you have a balance of about $10,000 and an interest rate of 18 percent annually. MBNA computes minimum payments by taking the interest for the month and adding $15. On this balance, your minimum payment would be $165. At this rate of $15 coming off the principal balance each month, it would take about 667 months, or 55 years and 7 months to eliminate the balance completely. In the meantime, you will have paid more than $60,000 in total interest- an amount more than six times your initial balance. And remember, this is assuming the interest rate doesn’t change. If it gets increased to, say, 24 percent, your monthly payment on a $10,000 balance will increase to $215. You would still be applying only $15 toward principal, but your monthly interest would now be $200 for your first payment. Two- hundred dollars in monthly interest! And with the adjustable rates being so frequently increased, along with the over limit fees and late fees, there is a good chance that a large balance with a bank like MBNA will become lifetime debt. You can easily go your entire life- even if you make a little more than the minimum payment each month- without ever eliminating this debt. Going back to customer service, I was especially appalled at MBNA’s unethical practices when it came to giving a straight and honest answer to a direct question. Besides the lie about the over the limit fees, I also caught MBNA in other sticky situations where they confessed only because of my consistent prodding. Take the high interest rate, for instance. When I found out that my interest rate spiked by more than seven points, I wanted a clear answer about why this would happen. I talked to one rep, who then put me on hold when I described the situation because she said I had to talk to a manager. When I discussed my concern about the high rate, I was told it was because of my balance being too close to the old credit limit (“old”, because I had already closed the account). I told her I felt this was an outrageous reason to boost anyone’s interest rate, especially by seven points. She still said there was nothing that could be done. Then, to see what she would say, I suggested that, because the payments were now very high, I was no longer going to make my payment at all. I had been using MBNA for several years and had always made my payments in a timely manner. If this was the thanks I was receiving, then I told her I would no longer make payments. I would just throw the invoice in the trash each month. Upon hearing this, she pointed out that MBNA had a debt elimination plan that I might qualify for that would reduce my interest and payments! It’s funny how she conveniently forgot to mention this at first, claiming there was “nothing she or MBNA could do”. Now, after hearing my threat to stop making payments, she quickly pointed out that a plan to help me really did exist. If anyplace else had done this, I would have been more vocal in my disgust. But at this point, nothing surprised me with MBNA. They handled the situation exactly the way I was expecting. They wanted to see how far they could push me and how much interest they could squeeze out of me. I had always paid the high interest in the past, so why should they give up now? They were going to keep squeezing, pushing, and pulling to suck every last bit of money they could from me. MBNA is now a memory for me. I have used a couple of MBNA’s credit cards in the past, and I have written reviews on them here at Epinions (both of them negative reviews). My experiences were good in the beginning, but my opinion of this credit card giant declined more and more with each passing month. No matter how well I kept my account current, they were always looking for a way to screw me. They deliberately gave me a low limit when I transferred a balance to try to catch me going over my limit. They raised my limit once, then gave me another offer to transfer more balances, which I accepted. Then, when I paid a large sum, they lowered my limit once again, making it close to my balance in order to catch me going over limit once more. Then, they lied to me on the phone about the over the limit fee; raised my interest rate to an obscene level; hit me with late fees even when my payment was mailed five working days before the due date; and then lied to me again about MBNA having no way to help me with the high rate of interest I was given. I could accept some of these extra charges and bad treatments if I deserved them, but I didn’t. I had a clean record with MBNA, making all of my payments in a timely manner (I consider those with late fees to be on time, because I mailed them in plenty of time to get processed. MBNA just conveniently failed to get the mail processed). My credit rating isn’t spectacular, but it’s better than average. There was no good reason at all to treat me the way they did. Instead of my record working in my favor, it seems that my discipline was met with penalties rather than rewards. Will I ever use MBNA in the future? Well, I don’t like to use the word ‘never’, but it would take something incredible to get me to sign up for this company’s services again. Too many unethical fees, too much dishonesty, and an astronomical interest rate that just keeps climbing and climbing are enough reasons to ditch my MBNA relationship for good. I cannot see any reason to use this company’s services and I doubt they will ever do anything to make this up to me. If you’re an MBNA customer in the early stages of your relationship, I say to you, enjoy it while you can. But don’t let even one thing go wrong with your account. If you do, it will snowball out of control and your total payments (if you ever pay off your balance) will end up costing you several times what you originally charged. To play it safe, I recommend destroying your MBNA cards asap and switching over to another company with greater ethics and better customer care. Once a company gets this bad, it will take a long time for conditions to improve. Do what I did and make a clean break from MBNA right now. You and your bank account will be happy you made the decision now rather than later. Follow These Links and Read Some Related Reviews: MBNA Mastercard/Visa MBNA Platinum Plus  |
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