Thousands of credit card customers have been dismayed to find that the APR charged on their accounts has been suddenly raised, in some cases to beyond the 30% mark. Chief culprit appears to be MBNA who have even hit customers with a whopping 34.9% APR, even when the customer claims to have had no problems with their account and no history of late payments or defaults.

MBNA, who issue cards under a multitude of brands including Virgin, Alliance & Leicester, Abbey, and a whole swathe of affinity brandings, say that they review account APRs on a case by case basis, and that such high hikes represent a tiny proportion of the customer base. The average rate charged is, according to MBNA, closer to 15%.

To make matters worse for those hit by rate increases, in many cases the jump coincides with the end of an interest free introductory period, making the sudden rise in interest even harder to cope with.

The rate hikes are, of course, being blamed on the global credit crunch as finance companies try to claw back some profits, and the suspicion has to be that customers in good standing are having their rates increased to cover the costs of those who are defaulting on their debts. Other companies to increase rates or even cancel accounts in recent months include Capital One, Egg, Lloyds TSB and Barclaycard.

This entry was posted on Sunday, July 27th, 2008 at 1:11 pm and is filed under Fees and Charges. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.