According to a recent report financial giant MBNA is pushing up the interest rate on the credit cards of some customers to a whopping 34.9%, leaving many borrowers facing punishing interest charges on their borrowing.
Many of the customers that are due to be affected are currently on special deals, such as 0% interest periods, and many have said that the interest rate hikes have been brought in to coincide with when the special deals come to an end.
The lending giant has also been accused of hiding the APR from its customers. One customer who has been on an interest free special deal with her credit card said that her interest rate had been hiked up to coincide with the end of the interest free deal.
She said: “Is it legal for a credit card company to suddenly up interest rates by several percentage points from the previous standard rate, just before an interest-free period comes to an end?”
The interest rate on one of the cards is due to rise to 34.9%, which she said “is such a whopping rate that nobody who has a decent credit rating would consider it for a minute”.
She went on to state: “I’ve no idea why they have done this. I have no county court judgments in my credit history and have been scrupulous in making all my credit card payments on time. It makes me look like some sort of subprime customer.”
Another customer who took up the issue with MBNA after his rate was hiked up said he received a final response in writing from the bank. He said: “They repeat their claim that 34.9% is a fair rate for the product and service they provide … In the meantime, I have been fortunate enough to have moved the balance elsewhere … but this has left a very sour taste in the mouth.”
