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MBNA Charging For Positive Balances

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MBNA Europe (the USA version was recently acquired by Bank of America) had a little bit of a public relations snafu recently when it sent a letter to some cardholders in the UK about how they would be charging them a fee for having a positive balance on their credit cards. Obviously the mainstream media has jumped on MBNA because that’s the popular thing to do these days but it’s still pretty ridiculous even if you don’t put the media spin on it. While it’s funny that one would have a positive balance (most of the time it’s by accident and you don’t know about it until the next billing cycle), for a credit card company to complain and actually threaten (it’s a threat, not a polite request which they could’ve gone with) a cardholder with fees if they don’t request a check is ludicrous.

One interesting note out of the article was this quote: “positive balances do not have protection from fraud” by a spokesman for MBNA. The article originates in the UK so their laws might be different but I’ve never heard of positive balances not being protected by the same fraud measures as a card with a negative balance. In fact, I just got off the phone with a representative from Citi and they assured me that you get the same liability protection regardless of what your balance amount is. So either the UK laws are different or someone needs a new spokesman.

Source: Telegraph.co.uk

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4 Responses to “MBNA Charging For Positive Balances”

  1. NCN says:

    I find it amazing that a credit card company would do something sneaky just to make a few dollars… wow!




    (Sarcasm, intended…)
    NCN

  2. Clever Dude says:

    I agree that most of the time it’s done by mistake (overpayment, credits, etc.), but I wonder if there are people out there who use their credit cards like a prepaid card. It would be the dumbest thing since you earn no interest and they say the balance isn’t protected from fraud, but I’m sure there’s SOMEONE out there who’s done it.

  3. Foobarista says:

    If you had a rewards card and wanted to set up autopayment to deal with ongoing bills, and were going to be in a situation where you may have sporadic or bad internet access (ie, you’re doing the backpacker tour through SE Asia) this may make sense. I’ve prepaid bills many times in the past; not everyone makes it easy to do autopayment (like my gardener) and you don’t always have easy access to reliable internet if you’re travelling outside the West.

    Once I had to pay my water bill from an internet cafe in Hangzhou. It took over an hour since the US connection was very slow and kept timing out.

  4. plonkee says:

    In general, the Consumer Credit Act of 1974 protects against fraudulent use of a credit card (defined as a type of credit-token), apart from a liability of up to £50 before you report it to them.

    MBNA’s terms and conditions state:
    THEFT, LOSS OR MISUSE OF CREDIT CARD
    If your credit card is lost, stolen or misused by someone without your permission, you may have to pay up to £0 of any loss to us. If it is misused with your permission you will probably be liable for ALL losses. You will not be liable to us for losses which take place after you have told us about the theft, etc.

    That seems to imply that it doesn’t matter whether you had a balance on the card or not. I bet MBNA would have a hard time arguing in court that you aren’t covered for fraud protection if you have a positive balance.

    Maybe MBNA do need to get a new spokesperson.


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