MBNA Fees

The nation’s second largest issuer, and leading “super-prime” credit card specialist, has boosted fees to a “sub-prime” level. MBNA America has raised its late fees and over-limit fees to $39 for accounts with balances over $1,000. MBNA cardholders, especially those near their credit limits, should also be aware the MBNA automatically assesses an over-limit fee whenever monthly finance charges push the account above the credit limit. Among the nation’s top VISA and MasterCard issuers, only Metris/Direct Merchants, a troubled sub-prime issuer, assess late fees and over-limit fees at such a high level. Most of the leading issuers charge $35 late and over-limit fees, while Capital One and Household have kept both fees at $29 each. Over the past twelve months, late-payment and over-limit fees have increased 4% and 5%, respectively. According to CardData (www.carddata.com), late-payment fees currently average $31.24, a 45% increase over 1998, and a 176% boost over 1993 levels. Over-limit fees currently average $29.05, a 42% gain over 1998, and a 141% increase over 1993 levels. Under MBNA’s new policy, late-payment fees are based on the balance on the business day after the payment due date. Late fees are $15 if the balance is $100 or less; $29 if between $100.01 and $1000; $39 if over $1000. Over-the-credit-limit fees are also based on the balance as of each statement closing date. Over-limit fees are $15 if the balance is $500 or less; $29 if between $500.01 and $1000; $39 if over $1000. Over the past three years, MBNA has emerged as a market leader in boosting cardholder fees, after being a fee laggard for most of the 90s.