MBNA charges for being in credit (BBC) {UK accounts w/positive balance}

[eppur_se_muova]

The MBNA bank has warned customers that they face a £10 fine if they leave a positive balance on their credit card.

Some cardholders were sent a letter at the end of January telling them that they risk facing what the firm calls a "credit balance service fee".

The charge will be made on accounts which have been unused for 12 months, the US company said.

MBNA says the fee will only be levied if customers fail to move the balance following the recent letter.

Cardholders have been told to avoid the fee by either transferring the money, spending it, or donating it to the company's nominated charity.
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more: http://news.bbc.co.uk/2/hi/programmes/working_lunch/6376405.stm


also,
Lloyds introduces credit card fee

Lloyds TSB is to impose a £35 annual charge on credit card account holders who do not use their cards.

The annual charge will apply to "low-usage" customers; including people who do not use their cards at all.

The bank has written to 50,000 customers to tell them that the charge will be levied on their accounts 30 days from the date of the letter.

On Friday, Lloyds TSB reported full-year profits before tax of £4.25bn ($8.3bn), up 11% from 2005.

At the same time, Eric Daniels, chief executive of Lloyds TSB, joined a growing chorus of industry figures questioning whether traditional free current account banking for customers in credit can continue over the long term.
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more: http://news.bbc.co.uk/2/hi/business/6389073.stm

This must be a British tradition, never heard of it here!

[DRoseDARs]

1. Well, some years ago there was a huge outcry about gift cards being charged for not being used...

...and the retailers that did that underhanded practice stopped. I hope the Brits nip this in the butt quickly; sounds like it should be highly illegal.

Edit: Misread what "positive balance" meant, but I stand by my point.

[demrabble]

2. Isn't MBNA Now Bank of America?

I thought that Bank of America had acquired MBNA.

[babylonsister]

4. Yes, it is. nt

[Atman]

3. I'm actually not seeing anything wrong with this

Although the fee should be minimal, just enough to cover the costs associated with billing and maintaining the customer's account, and not profit centers. After all, no bank is issuing credit cards because they're nice guys just out to help people. They issue cards to make money, and if a customer isn't using the card, the bank isn't making money off it. Credit cards, after all, are not technically mandatory for anyone. I say "technically" because in today's society, they are pretty much necessities for many people...but obviously not those who open the accounts and never use the cards.

.

[muriel_volestrangler]

5. It doesn't seem clear if a zero balance will attract the MNBA fee

I suspect it would, because the "not used for 12 months" bit sounds more likely to apply to one never used but with a zero balance, than "never used but a positive balance" (presumably someone who wants it for emergencies, but doesn't even want to go into 'debt' for just a few days).

As for free current account banking (= 'checking' account), it's been available if you look properly for it over the past 20 years or so, when banks seemed to start getting more competitive with each other. But some banks are trying to limit it (my bank just started specifying a larger minimum amount of money into the account each month than my income for free banking, or that I hold a savings account with them; so I've opened a savings account with £1. That would seem to be satisfying them).