Latest Debt News
Rate tarts targeted
09/03/2006 17:53:00
A credit card company hopes to deter people from transferring large balances between cards with the introduction of new charges.
As from April 1st, MBNA will raise its maximum fee for balance transfers to £75, up from the £50 charge at present.
Increases are also set for the minimum fee for balance transfers, cheque and cash transactions, which will increase from two to three per cent.
The company admits that the move is designed to squeeze out those who habitually transfer large balances between credit cards, colloquially referred to as 'rate tarts'.
Richard Brown from Moneynet warned that competitor providers were likely to follow MBNA's example.
"Over the past few years borrowers have taken advantage of the benefits of zero interest balance transfer facilities, but there has been a worrying trend in recent times for card firms to impose substantial charges on this popular service," he said.
"Now, with charges continuing to creep up, the balance transfer scenario is not looking like the great value deal it once was."
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