Card Company Increases Payments

One of Britain’s largest credit card providers is demanding bigger payments from its customers.

MBNA is increasing its minimum monthly repayments from 3% to 5% in September. This is a sure sign that the rates squeeze is spreading.

Borrowers with an average debt of £2,300 will see their minimum payment increase by £46 a month.

Only last month MBNA raised its minimum rate from 2.5% to 3%.

It is thought up to a third of credit card users have had their rates hiked over the last 6 months according to latest research.

About 14% of MBNA customers have seen rate increases over the last 12 months and Egg has increased rates for 11% of its customers. It is when 0% deals come to an end that the huge rate hikes are applied. Some have seen rises of 10% - from 14.9% to 24.9% when their 0% deal ended.

MBNA have said not all customers will have to pay the new 5% minimum but did not say how many would be affected.