How MBNA Takes Away Your Benefits, Gradually
From time to time, credit card issuers can take away benefits promised at the time of your application, or change the terms of credit card, often in a discreet manner. If you receive some notices from your bank, don't throw it away. It is often interesting to read how credit card issuers can tweak things to their favor.
For example, join me in a journey to make sense of the one-page notice I just received from MBNA on a number of program changes:
Payment Due Date: MBNA is saying the Payment Due Date now can be as least 20 days and as many as 32 days after statement Closing Date, and Due Date can change from time to time "based on such factors as your payment history."
Analysis: How does it benefit MBNA? If you are using a bill payment service, you might set a fixed date every month to send money to MBNA. Now think twice before you continue your practice -- as your Due Date can change over time, if you rely on a fixed schedule, you might well fall behind on payment at one point of time.
Common Carrier Travel Accident Insurance: Effective February 1, 2005, the Common Carrier Travel Accident Insurance coverage is reduced to $100,000 from the original coverage of $500,000 or $1,000,000.
Analysis: It is actually a nominal cut. What's the chance you are involved in an airplane disaster? It is much more probable you get a car accident in your life than an air crash. Nevertheless, this reduction improves MBNA's bottomline.
WorldPoints Rewards Program Change: Effective December 31, 2004, the cash redemption schedule is changed to: $12.50/2,500 points, $25/5,000 points, $37.50/7,500 points, $80/10,000 points, $120/15,000 points, $160/20,000 points, $250/25,000 points, $350/35,000 points, $500/50,000 points. Originally, points can be redeemed for cash starting at $40/5,000 points.
Analysis: MBNA is lowering the cash value of points at the low end and customers will not benefit. One can either accumulate more points before redemption, or redeem points for non-cash merchandise (with fancy but unrealistic reference price). Either way, MBNA wins.
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MBNA is really slipping in my opinion, customer service-wise. Similar to your "close encounters" entry, all of my MBNA accounts were suspended recently to due to "too many recent opened credit cards". I wish I had thought as quickly as you and brought up my unredeemed points, however they managed to call me at 5am (I guess they figured i'd be home) and I groggily accepted.
MBNA is the only one of my 3 credit cards for which it wasn't possible, through their online account set-up, to automatically pay the full balance each money when due. The only choices available were to specify a fixed dollar amount, to pay the minimum amount, or to pay the full balance manually each month. I called customer service and they confirmed this.
Since I expect to be travelling when my card expires in May, I also asked if my expiration date could be moved up to December or January so I wouldn't have to deal with the hassle of the card expiring while I was away. I was told this was NOT possible.
There were 2 full days when I tried calling again and again and could never even get through to a live customer service representative to address these 2 issues! I was on hold endlessly.
I will be cancelling my MBNA VISA card very shortly.
