Bank of America Purchases MBNA
Published by Elana June 30th, 2005 in Business & Finance, Credit.I have mixed feelings about the news of Bank of America purchasing MBNA (BugMeNot login info). On one hand, I somewhat respect Bank of America and the amazing business sense it had to perform a seemingly (mostly) flawless merge with FleetBoston a few weeks ago. However, MBNA is a company I’ve had less and less respect for over the past months. Although it hasn’t been at the forefront of any huge identity theft stories or big news blow-outs, MBNA has steadily been rising their “hidden” rates. I’m not talking about easy to figure out rates like annual fees or your annual percentage rate on your credit card; I’m talking about things like the 2% additional fee for international conversion which is pure profit on behalf of the credit card company. On top of this, despite my ever improving credit score, MBNA is the card company least likely to decrease a high APR. The result has been for me to virtually retire all my MBNA cards, the main one being the infamous NHL Flyers card which has Carl on it as an authorized user so he can make purchases as my agent. Please note, I have not closed this account, mainly because I’ve had it so long and it has a long range of credit history I don’t want to lose, but I have put the card in my emergency use only wallet.
One of the reasons I stick with Providian as my main spending card is the fact that they are incredibly open about their fees and charges. I have a 7.99% APR on purchases. I pay the standard Visa charge of 1% on currency conversions. Plus, Providian happily shares their customers TransUnion credit score with them. No other company that I am aware of performs this particular service.
Another card company I’ve been pleased with is Capital One. Again, they don’t charge over the 1% in currency conversions, and as a card I opened about a year ago to gain a low APR for the life of a transfer balance, they have been wonderful about keeping the traps out of their card. I have been using it for over a year, always made my minimum (and after the first payment, more than my minimum) payment, and never has the rate gone above what they originally promised. I’ve had problems with the old raise the rate for no apparent reason with my FirstUSA card in the past. I’m very aware of the credit companies propensity to raise rates if you miss a payment with another company or loan, but this has rarely happened for me. FirstUSA (and MBNA as well) has taken the raising of rates for a missed payment elsewhere to a whole new level. They’ll use it as an excuse to completely gouge you. On top of it, they’ll never lower your rate back to what it was before your unfortunate error.
What I hope is Bank of America instills some of their good business sense and ethics on MBNA, but I’m not familiar enough with the dealings of BoA to figure out which is more likely, a further corruption of BoA, or the saving of MBNA.
I’m looking forward to them taking over MBNA. MBNA stinks. I, too, have stopped using mine because they won’t lower my rate. You know what’s funny, though? When I called them about it, I told them I had another credit offer and why should I stay with them when I have a better offer? “Oh, well we offer you all these great benefits. If you’re late with your payment once every 12 months, we won’t penalize you.” “Have I ever been late on my payment?” “Well, no.” “So that’s no good for me, then.” Keep in mind, this was back probably 6 years ago before penalizing you for late payments on other accounts was thought of. Still, though, it’s nice that they proclaim these great “benefits” only to disclaim them in the fine print now. I was calling them because my sister’s MBNA card had a lower rate at the time. They told me on the phone they didn’t have any lower rates than the one I had.
I have a few more MBNA stinks stories but I’ll spare your comments.
I had BoA for my Mustang loan. Well, E-Loan -> Nations Bank -> Bank of America. Because of the bank purchases, I never was able to use their online account access. Still, though, they were quite hassle-free.
When I called MBNA, I got much of the same ‘benefits’ line. I told them I have cards with lower than 8% on the interest rate for purchase and they wouldn’t believe me. I said I wouldn’t use their cards anymore, and I don’t.
MBNA also handles the Apple Loan program. For 18.99% APR they’ll loan you the money so you can buy your computer from Apple. It becomes revolving credit when you shop at Apple’s stores too. It’s much cheaper to just put it on a lower rate credit card.
FirstUSA was bought by BankOne and they’ve now merged with Chase. (Though they’re still working out exactly what to do with the credit card branches.)
All these consolidations concern me greatly. There are getting to be fewer large credit card issuers out there, which reduces the incentive to offer rewards and low rates.
I think it’s an inevitability in the downturn in the economic market. The financial institutions are shoring up their defenses in order to survive. It’s happening in businesses too. Big fish are swallowing up the little fish. Just look at how Google is surviving and all the small blog companies getting bought out by larger ones.