Payment Allocation

We're changing your credit card to offer even better value

Any payments that you make from 1st September 2010 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 credit card for everything - balance transfers and everyday spending, without losing the benefit of any promotional rate you may have.

What do I need to do to take advantage of this benefit?

Absolutely nothing. We will do it automatically!

It really is the only credit card you need in your wallet.

Payment allocation flow chart

We receive your payment

Your statement balance and any recent transactions are paid in order of interest rate, highest to lowest

We continue to pay balances in order of highest to lowest interest rate until the whole payment has been allocated or the balance paid in full.

Why are we doing this now, as the government have given card issuers until January 2011 to make this change?

Once we committed to this change we wanted to implement it as soon as possible, rather than have a long time-delay between the government announcement and the customer enjoying the benefit.

Why haven't we done it earlier?

It has been industry practice to do things this way and we were no different from most other credit card providers in the way we have always allocated payments. However, the industry has collectively acknowledged 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.

How will this 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 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.

Can I choose what order my balances are paid off?

No, as the payment is allocated automatically.

Will the strategy be backdated to cover payments I have made previously?

No, this change only affects payments received after the 1st September 2010.

Will my direct debit payment be allocated in this way from now on?

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

Will this show any differently on my statement?

No, statements will remain the same.

If I have 2 or more rates the same on my account, which gets paid off first?

Full details about how the payments will be allocated can be found in your terms and conditions. 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.

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Credit Cards issued by MBNA Limited. Registered Office: Stansfield House, Chester Business Park, Chester CH4 9QQ. Registered in England and Wales under company number 02783251. Authorised and regulated by the Financial Conduct Authority. MBNA Limited is also authorised by the Financial Conduct Authority under the Payment Services Regulations 2009, Register Number: 204487 for the provision of payment services. Calls may be monitored and/or recorded for quality and training purposes and for compliance with regulations.