MBNA reforms order of payments
by Gill Montia
Story link: MBNA reforms order of payments
MBNA customers can expect to see their credit card costs reduce from 1st September.
The Bank of America subsidiary is changing its order of payments so that customers’ monthly repayments are used to pay off their most expensive debts, such as cash withdrawals, first.
New measures outlined by the Government in March mean that all UK credit card providers will have to fall into line on their order of payments by January of next year.
Come 2011, customers will also have 30 days in which to reject increases in credit limits that have not been requested, and those who are already struggling to pay will not receive unsolicited increases.
In addition, card providers that hike rates on existing debts will have to give customers 60 days’ notice and while rules on minimum repayments will remain on existing accounts, for new customers the minimum monthly repayment will need to cover interest, fees and charges, plus 1% of the principal.
Last month, MBNA launched a new mobile phone service for its UK customers.
The Mobile Banking Text service allows cardholders to retrieve account information, including balance, payments and transactions, within seconds, by texting 83838.