MBNA Bring in Payment Allocation Changes end of April

MBNA will change the way payments are allocated to customers' credit cards from 29 April 2011.

The move may benefit many customers and means that payments made on MBNA credit cards in Ireland will go towards paying off the balance with the highest interest rate first.

All customers will receive notification outlining the changes to the way payments are allocated to their accounts beginning in February.

Frequently Asked Questions

What's changing?

Any payments that you make from 29 April 2011 will go towards paying off the balance with the highest interest rate on your credit card first.

How does that work?

Let's suppose you've made a balance transfer at a rate of 0% and you've made purchases with your card at a rate of 16.9%. When we receive your payments they will pay off your purchases at 16.9% before your balance transfer at the lower rate of 0%. You can now use your card for everything - balance transfers and everyday spending, without losing the benefit of any promotional rate you may have.

Do I need to do anything?

Absolutely nothing. We will do it automatically!

This change could reduce the amount of interest that you pay.

With this change in the way payments are applied, if I have two or more balances with the same rates on my account, which gets paid off first?

Full details about how the payments will be allocated can be found in your new terms and conditions that are being sent to you during February 2011. However, by way of example, if you have two or more promotional offer interest rates on your account at the same rate, e.g. 0%, then your payment will go towards paying off the promotional offer with the earliest start date. If the promotional offers both started on the same day, then the promotional offer that will become the highest standard interest rate when the promotional offer ends will be paid off first.

How will the change to the way payments are applied affect me?

This change means that any payment towards your credit card balance will be used towards paying off any balances that are being charged at the highest interest rate first. The effect to each individual customer depends on how you use your card (for example if you always pay your balance in full each month the change will not affect you). Most customers will pay less interest as a result of this change.

Why are we changing the way payments are applied, as the Irish government has not issued any guidance on making the change?

Once we committed to this change for our UK customers, we wanted to implement it as soon as possible for our customers in Ireland so all of our customers could also enjoy the benefit.

Will the change in the way payments are applied be backdated to cover payments I have made previously?

No, this change only affects payments received after 29 April 2011.

With the change to the way payments are applied, can I choose what order my balances are paid off?

No, as the payment is allocated automatically.

Will the change in the way payments are applied show any differently on my statement?

No, statements will remain the same.

Why haven't we changed the way payments are applied earlier?

In the UK it was industry practice to do things this way and we were no different from most other UK credit card providers in the way we have always allocated payments. However, the industry has collectively acknowledged UK government's recommendations that certain practices could change to benefit customers. We are introducing the change to the way we allocate payments as quickly as we possibly can.

With the change in the way payments are applied, will my direct debit payment be allocated in this way?

Yes, payments received by any method will be allocated in the same way.