MBNA charges for being in credit

Credit balances can arise from overpayments or following purchase refunds

The MBNA bank has warned customers that they face a £10 fine if they leave a positive balance on their credit card.

Some cardholders were sent a letter at the end of January telling them that they risk facing what the firm calls a "credit balance service fee".

The charge will be made on accounts which have been unused for 12 months, the US company said.

MBNA says the fee will only be levied if customers fail to move the balance following the recent letter.

Cardholders have been told to avoid the fee by either transferring the money, spending it, or donating it to the company's nominated charity.

31st March

Customers have been given until 31 March to follow these instructions or face the fine.

MBNA also claims that purchases made with credit balances may not be protected under the Consumer Credit Act.

Mark Bowerman of the Association of Payments and Clearing Services told Working Lunch there is nothing to stop the company taking the fee.

"The banking industry's general advice is not to run your card account in credit," he said.

"It is a credit product and should be used that way."

MBNA is now one of the three biggest credit card issuers in the UK and has grown rapidly in recent years, partly through acquiring smaller rivals.