How MBNA Abused Lola

After the guardianship hearing in January 2004, I confiscated Lola's credit cards. I questioned Lola about how much she owed, and she thought it was about $2000. I breathed a sigh of relief, thinking it could have been a lot worse. When I located the latest bills, which were on the kitchen counter, open but unpaid, I learned that it actually was a lot worse.

The American Express card wasn't too bad; she owed less than $1,000 on it. The MBNA bill was another story. She had two MBNA cards; one had a balance due of about $12,000 while the other account had a few hundred on it.

All her life, Lola had always paid off her credit cards each month. This level of credit card debt was unprecedented and deeply disturbing.

It seems that when Lola ran out of money to wire to Costa Rica and Canada, she wrote a check for $10,000 against her MBNA Visa card and deposited it in her bank. You know those credit card checks that come in the mail from time to time? Yep, one of those. MBNA very kindly and generously doubled her credit limit so she could do this.

I diligently paid about $50 more than the minimum payment each month, increasing the payment a little as soon as I sold the car.

Since I made reasonable and timely monthly payments, I was astounded when I opened an MBNA bill in midsummer 2004 and saw that the interest rate had jumped from around 15% to a ruinous and usurious 27%.

Outraged, I picked up the phone and started calling. For an hour or so I talked to everyone but the CEO, repeated my story over and over, and spent more time on hold than talking. Finally, the customer service representative revealed his findings: "We raised her rate because those regular payments indicated that she was treating the charges like a long term loan." Yes, he really did say that, in almost those exact words.

MBNA knew the situation of course. I had sent them the guardianship court order a week after I got it; the image was available on line to everyone I ever spoke with. I had even tried to disallow any future charges to the card. They said they couldn't do that; I would have to review each bill and dispute any charges that appeared, and there were many. I had spent hours on the phone with MBNA in early 2004, even filing a fraud complaint for $1000 worth of suspicious charges from psychics, publishers, and someone in Amsterdam.

My next step was to lobby the CSR for an interest rate reduction. This was even harder than getting an explanation. Another couple of hours and a manager or two later, I finagled a reduction to 18%, effective the next monthly bill.

Alas, it was almost a year after this MBNA debacle, that I closed on the house. During that time, I had to pay that outrageous 18% interest rate. I paid off this account the day I deposited the proceeds. I seldom use credit cards anymore.

You probably know that Bank of America bought MBNA. They deserve each other.