Make your payments on time and what happens? Maybe you do OK and maybe you end up with a huge rate hike.
Remember how former FBI Director Louis Freeh testified before the Senate last week that his new boss, credit card giant MBNA, never jerked up interest rates just because a customer was in default on another loan? At that same hearing, testimony was offered about MBNA practices that suggested Mr. Freeh was not telling the truth. Since then, people have been emailing their stories about MBNA practices that flatly contradict Mr. Freeh.
But more MBNA practices keep emerging, practices that seem to converge on the same bottom line: the customer signed a contract that binds the customer, but MBNA can change the terms whenever it wants. Look at this one from Joe Soseville:
I had an experience with MBNA where the artificial intelligence (AI) that computes my credit score drove the interest rate on several of my MBNA accounts up more that 12% and 15%, respectively. On each account I had a stellar history and had established outstanding creditworthiness. Ironically, through industry acquisitions and mergers, MBNA had acquired these accounts and this resulted in my credit score's AI showing that I had now become an "at risk customer" and MBNA automatically raised my interest rates.
So Joe pays on time, MBNA changes its computer programs, and Joe’s interest rate goes up by 12-15 percentage points. And Louis Freeh tells Congress what a great company he works for, a company that never does this sort of thing.
MBNA seems to think that a contract a one-way street—the customer must meet the terms but MBNA can change them whenever it wants. Great deal for MBNA—just not for the rest of us.