MBNA Profits Plunge

[AnnInLa]

MBNA Profits Plunge
Consumers Pay Off Cards, Interest Income Plummets




By Martin H. Bosworth
ConsumerAffairs.Com

May 24, 2005
Financial giant MBNA may have to take off its rose-colored glasses. During the most recent quarter, MBNA's actual earnings fell to $31.7 million, or 2 cents a share, far short of its projection of $519.7 million, or 4 cents a share.

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Of potentially greater long-term significant, more and more consumers -- perhaps stung by exorbitant increases in their interest rates -- are paying off their MBNA credit card debts faster than expected.

Like other banks, MBNA relies on the interest, service fees and late charges it gets from its credit cards.

snip

Perhaps the passage of S.256, the Bankruptcy Reform and Consumer Protection Act, which makes it harder to resolve credit debt through bankruptcy, has scared debtors into taking care of business faster. The financial giant spent millions of dollars priming the political pump to ensure it would be able to wring the last drop of blood from its credit card customers. Also, MBNA and other credit card issuers have recently begun raising the minimum monthly payment. Combined with higher interest rates, this may have effectively priced credit card debt out of the market for some consumers.



The moral of this story?

Paying off your credit card debt not only cleans up your balance sheet and gives you extra cash to spend and invest, it also puts a chink in the armor of the companies who've steadily tightened the noose around consumers' necks.

http://www.consumeraffairs.com/news04/2005/mbna_profits.html

[no_hypocrisy]

1. To MBNA: Be careful of what you wifh for, because you may get it.

I've paid my balance in full to MBNA for years. My revenge.

[Cornus]

2. Me too! nm

[losdiablosgato]

8. My wife and I go one better

Not only do we pay off our cards every month in full. We also make sure to get all the points and free airline tickets we can.

[dbt]

3. SUFFER, you sons-a-bitches!

You got bitten when you cozied up to a snake? Who'd a thunk that?

:evilgrin:

[no_to_war_economy]

4. have had a MBNA card for years

and NEVER carried an outstanding balance from one month to the next

always paid in full ... glad I am contributing to the demise of the board of directors portfolio

[Stephanie]

5. Thanks for reminding me!

I paid it off, but I forgot to call them to cancel it. Ha ha ha, MBNA! Reap what you sow!

[formercia]

6. I'll be completely paid off by the end of the Year

Ohh, that overhead you guys pay out is gonna hurt. Waahhhhahaha!

Now you know what paying interest feels like.

[KittyWampus]

7. One More Year For Me As Well.

[indepat]

9. My bank is selling its credit card business to MBNA: will cancel my card

after next billing cycle, further dampening MBNA profits, albeit a minuscule smidgen.

[Coventina]

10. I was treated really rudely by their customer service

when I called to ask why my due date continually creeps up by a few days each month. Ok, maybe I was confrontational by suggesting that they do it to try and collect more late fees, but the rep really got overly defensive and hostile.

He said huffily that they are loaning me free money, and can no longer afford to let me have it for as long as they used to be able to do, due to rising interest rates.

Thanks for the reminder, I'm going to my credit union today, so I'll pick up a credit card application from them. HA HA HA!

[TNDemo]

11. How do the other credit card companies fare in comparison?

I hope they all go belly-up, MBNA in particular. About 14-15 years ago they treated us like crap and I wrote them a letter stating I was going to get out of the mess I was in (I did) and when things were better they would never have my business again. They have sent me numerous offers but hell will freeze over before I have an MBNA card again.

[Deja Q]

12. Let the fuckers go out of business.

I hate banks, I hate credit card companies, and their abuse of power and greed has made me hate money. There are better ways, but too many people are happy thinking "inside the box".