Credit is a financial tool that can help you reach your goals and conveniently achieve financial flexibility. Explore MBNA’s tips for managing credit to learn how you can manage it responsibly, and find out how to control your credit so it doesn’t control you.
Reducing credit costs
Understanding balance transfers
Understanding interest rates
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A good first step to manage your credit responsibly is to manage your money responsibly. Here are some practical tips you can follow
Borrowing responsibly means not taking on more debt than you can handle. Here are a few practical tips:
Paying responsibly means paying your bills consistently and on time. It is essential part of building good credit. Here are a few practical tips when paying your MBNA credit card bill
Learn more about paying responsibly at Billing and Payments.
Here are some warning signs of financial stress. If any of these apply to you, it may be time to take a fresh look at your financial situation or seek professional assistance
Financial stress is often the result of the unexpected. Unpredictable events can be expensive and usually happen when you can least afford it. That's why credit card companies offer optional credit card balance protection insurance, such as the MBNA Credit Card Payment Protection Plan to protect you should the unexpected occur.
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A credit card is a loan, so the lower your View Details balance , the less interest you'll pay. You can avoid paying interest altogether on new purchases by paying the new balance total by the total minimum payment due date. For cash advances , deposits or balance transfers interest will accrue from the first day of the transaction. But whatever types of transactions you make, if you can't pay your new balance total in full, paying more than the total minimum monthly payment can help reduce your interest costs.
Since it's easy to spend more than your credit limit, keeping track of your balance is critical to avoiding limit fees . Keep in mind that
Transaction fees are usually based on the amount of the transaction. You may not be able to avoid them, but if you understand how they work, you can often pay less. Here are some basics
Using a credit card will always include paying fees. However, there are still ways to enjoy the convenience of your credit card while containing your costs. Here are a few examples:
A balance transfer is where all or part of a balance (debt) owed with another creditor is transferred from that creditor to another. This is usually done to save money on interest rates.
There is often a fee for transferring balances from one creditor to another. Check the specific terms and conditions of your account.
At MBNA, your credit card application may allow you to request the transfer of balances. After you are approved, you can go online at www.onlineaccess.ca or call us to transfer as many loan balances as you like up to the credit available on your account. Learn how at Balance transfers, deposits and cash advances .
Yes, this will depend on your credit limit which is determined by the issuer when you open your credit card account, as well as the fees associated with the transfer. The credit limit on your account will be individual to you and is determined by a number of factors including your credit history .
Even if math isn't your favorite subject, the Annual Interest Rate (AIR) for your credit card is a number that you should be familiar with. The AIR describes the cost of your credit as an annual rate
Understanding your AIR(s) can help improve your financial decisions. You could save by assessing your current rate(s), comparing rates for new offers and avoiding actions that might trigger a default rate . Understanding this critical feature of your account can help you save money in the long run.
It's not unusual to have one AIR for purchases and another for cash transactions. Issuers may also encourage card usage by offering promotional AIRs that give you a lower AIR on certain types of transactions for a set period of time. When the time is up, the AIR goes back to the standard AIR. Used wisely, these low promotional AIRs can save you money.
One type of AIR to avoid is the default AIR. These higher AIRs are often imposed if you pay late or spend more than your credit limit. Some issuers may also impose these rates for other reasons—such as if your payment is declined. Your credit card account agreement will have the details.
Because customers borrow money for varying amounts of time, banks review account balances daily to ensure customers are only paying for the time they borrowed the money. Therefore, banks commonly charge interest on a compound daily calculation. Each day, they typically review the balance, charge a Daily Interest Rate (DIR) to it, if applicable then charge the subsequent day’s interest based on that day's balance plus incurred interest. This computation continues daily for the entire month statement billing cycle .
You can check how monthly interest is calculated for your account, by transaction type, in your account agreement.
Because your balance may vary from day-to-day, issuers use different methods to determine the balance that is subject to interest charges. The method your issuer uses should be described in your account agreement. Three of the most common methods are average daily balance , adjusted balance and two-cycle balance . Your issuer will compute separate balances for transactions with different AIRs.
A portion of your monthly payment is applied to the principal amount of your credit card account. Compare your monthly payment to your interest charges. Paying even a little more each month can help pay off your debt faster.
Consider a balance transfer or debt consolidation loan—but only if you can save on interest and avoid getting into more debt. Be smart, monitor your balances and make sure you pay off your accounts with higher interest rates. You can do this by transferring your collective balances to a lower rate credit card. Learn how at Balance transfers, deposits and cash advances .