Thursday Jul 24, 2014

TD Completes Acquisition of MBNA Canada’s Credit Card Portfolio

1 December 2011

TD Bank Group has recently announced that it has completed the acquisition of substantially all of MBNA Canada’s credit card portfolio, not to mention other assets and liabilities from Bank of America Corporation.

MBNA Canada is currently the largest MasterCard issuer and the fourth largest credit card issuer in the country. With the end of this transaction, TD’s Canadian credit card business is expected to have approximately 5.8 million active accounts. TD also expects to complete the conversion of this acquisition in about 18 months from now.

Tim Hockey, President and CEO, TD Canada Trust explained that the completion of this transaction will significantly increase TD’s current existing Canadian credit card business. With this acquisition, TD will be positioned as the top issuer in the country.

What will happen to current MBNA Canada customers?

With the conversion of this acquisition expected to be complete in about 18 months, it means business as usual for MBNA Canada customers. What this means is that in the meantime, nothing will change for MBNA Canada customers, as MBNA Canada will continue to operate on a standalone basis.

MBNA Canada offers great credit cards, such as the MBNA SmartCash Platinum Plus MasterCard. At the very least, MBNA Canada customers have over a year and a half to reap the benefits of using such a great cash back credit card.

I am not sure what TD plans on doing with this new acquisition; I can only assume they plan on becoming a dual credit card issuer, and hopefully we will see TD MasterCards’ on the market.

I do not see why TD would not want to keep some of MBNA Canada’s credit card lineup, from what I have seen they offer great credit cards that the public enjoys to use, then again this is just my opinion on the topic.

I for one am glad to see TD acquire MBNA Canada’s credit card business as it will help them build on their increased scale of credit card business and in the long run gain new customers using current and new products.

What do you think of the TD purchasing MBNA Canada’s credit card business?

 

About the Author

Sensei

My favorite weapon of choice is the samurai sword. I use it to cut my chicken during dinner, cut my hair and periodically carve my name into stone when I am bored. I love meditating on top of a 15ft high pole and eating those sushi’s with smoked salmon on top. I love everything there is about Canada and everything financially related to Canadians. I write deily posts from Canadian Banks to Credit Card information.

Comments (13 )



Jeff Wrote:

I for one – not impressed! MBNA (Bank of America) offered some excellent card products such as the Prestige Platinum Line of Credit – mine with a fixed APR of 6.75%. I have no hope that TD will allow that rate to remain. Tim Hockey in his address for the announcement of the purchase advised of an increase in income on the purchase when MBNA accounts are brought into line with TD. (No doubt meaning increasing rates to 19.50 & 21.50%) TD expects to see lower rate MBNA accounts to default when brought into line with TD, and many other accounts to drop off when paid as TD has no intention of maintaining teaser or low rate accounts. TD has made provisions for an expected charge-off for those with higher balance-lower APR’s when brought into line with TD. Unfortunately Canada did not adopt the same law as the US allowing you to keep the lower APR until the account is paid off if you don’t agree to an APR change, or change in terms. I’m not putting a dime on this card since the purchase, then I can say I never used the card after the transfer of ownership, and did not agree to the new terms by using the card(s) No doubt the banks had a big hand in that option of being able to refuse a change and maintaining your APR until paid off being omitted. TD walks the fine line of usury, and to me has become nothing but a subprime bank looking to ripoff customers. American’s hate them, and feel screwed after TD’s purchase of Commerce Bank.
MBNA always applied payments to the highest rate of interest on your account first, then once the higher rates were paid, payments were applied to the lower rate balances. Already in November MBNA under the direction of TD changed that policy…check your mail!!! I will be opening either a Major League Baseball MasterCard, or go back to the Alaska Airlines MasterCard (I originally had a Alaska Airlines VISA with Bank of America prior to the BOA/MBNA merger in 2006) as BofA Canada Bank (new name) are keeping these accounts (also including Shoppers Drug Mart) and are not part of the TD purchase. MBNA and Capital One brought competition into Canada, as well as lower rates, with MBNA gone – it’s over. Yes, Capital One has some low rates, however they’re not a great issuer – just try to get a credit line increase – you can’t. So goodbye FIA card services, I got a lot done with my low rate card, and I am already missing you! Once my Line of Credit is paid in full, its gone. I’ve got 18 months to do it, and it’s priority ONE! Also TD made remarks that MBNA had high limits that will be reigned into TD’s policies. I guess that $17000 Line of Credit will be reigned in shortly too. This purchase was good for TD and it’s shareholders…MBNA’s customers however are going to be screwed – BIGTIME! I’m sure the Credit Union Federations are wishing they never sold CUETS to TD. TD has a stranglehold on almost everyone in the country now. I’m sure their are a lot of MBNA/CUETS cardholders that feel the same, and in the end, TD will lose on this purchase.

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Jeff Reply:

Correction: CUETS sold their accounts to Bank of America (MBNA) and not TD. However I’m betting they wish they didn’t now.

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Philip Reply:

I support Jeff’s comments.
In fact TD has started increasing interest rates on cards mine wnet from 9.9% across the board to 14.9% on purchases, 16.9% on balance transfers and 24.9% on cash withdrawals. It is not bordering on Usury l It is usury.

They seem to be looking at card balances and increasing the rates on cards with the higher balnce owed. They only raised the card with the higher balance. I paid it off especially since I had made a short term withdrawal at 9.9 and they were now xharging 14.9%.

TD is doing the bidding of the government since having been allowed to take over MBNA and change the exisitng credit card rates–TD is the firs tbank to suspend account of Iranians in Canada.

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Philip Reply:

I support Jeff’s comments.
In fact TD has started increasing interest rates on cards mine wnet from 9.9% across the board to 14.9% on purchases, 16.9% on balance transfers and 24.9% on cash withdrawals. It is not bordering on Usury l It is usury.

They seem to be looking at card balances and increasing the rates on cards with the higher balnce owed. They only raised the card with the higher balance. I paid it off especially since I had made a short term withdrawal at 9.9 and they were now xharging 14.9%.

TD is doing the bidding of the government since having been allowed to take over MBNA and change the exisitng credit card rates–TD is the firs tbank to suspend account of Iranians in Canada.

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Lyle Reply:

You were dead on the money. Just got off the phone with MBNA. June 2012 interest rate of 6.99% across the board. July 2012 statement now 9.99% for purchases and 24.99% for cash advances. Called in to complain, reduced cash advances to 9.99% Bought a used tent trailer in May 2012 for $6000, had to use cash advance to pay for it. Thought I could live with 6.99%. What a surprise today. MBNA customer service center said this is happening to everyone with a MBNA card. There should be stiffer laws regarding this. When the Bank of Canada has such a low rate, why can these loan sharks bite the hand that feeds it ? Is it because the USA as well as European countries have so much bad credit that the banks have to try to take down Canada as well. I bet the number of bankruptcies will be fueling the financial news starting in September 2012. Financial collapse December 2012. Just in time for the end to the Mayan calender.

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McLean Wrote:

I think it’s great! TD is a great bank

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Philip Reply:

How does increasing credit card rates from 9.9% to 14.9% without prior notice make TD a great bank?
Failure to notify! Rate Jacking! Selective increasingly debt of consumers based on a guess that the credit card holder is unable to pay the debt off immediately! Machievalian is what it is and making the MBNA credit cards holders finance the TD takeover of Bank of America MB NA cards.–Collusion and anti-compwetitive that is what it is.

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Brad Wrote:

Everything was fine until they took away the online portion and went to telephone inquires and paper statements! Nice work Fred Flinstone! I am cancelling my cards.

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Tom Reply:

With no online information, I for one don’t like this card. I do a lot of book keeping online, this card does not allow me to keep up to my weekly accounting

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Sandra Wrote:

I had a rather large line of credit from MBNA. I was late by 2 (TWO) days with a single payment in about 4 years. It happened to be when I had a preferred rate at 4.99% on about $7500 I used for home repairs. My renters moved without notice and trashed the place. When I called in April to say the paperwork shows that rate was to stay in effect til Dec. 12 they argued with me saying I was totally wrong about the date. When I proved I was right, they said “oh yes, I see that now but you were late with a payment so that’s why that rate was cancelled and moved to the MUCH higher one!” So first I was an idiot who had the wrong date. Then I was delinguent on my payment as the back up reason for the 12% increase in interest! Then the rep “warns me” (his words) they are cranking up the overall interest to 19.99% on the total balance. So now that’s a 15% increase. I was right on track to clear the $7500 on schedule in Dec!

I check the agreement yet again and it states I have to miss two consecutive payments to trigger the higher rate. They ignore me request to maintain the preferred rate til Dec. 2012. Then I get another weird notification on my statement that says my current interest rate ends on the August 2012 billing date which is different than what I was previously told. I guess that means the original rate of 16.99% to 19.99%?

Anyway, I reduced payments on my other 2 cards to 1.5 X the minimum and have been adding that to my MBNA card. Anything else I can scrape up goes right to that card even if I have to make 5 payments each month when I round up an extra $50 or so. I’m sure MNBA has noted the fact I have been pushing hard to reduce the debt and taregetted me ASAP to suck as much extra cash as they can before I kiss them off.

When I’m done, I’m going to close my account, chop the card up and send it directly to the President and CEO of TD Canada Trust inside a very nice Thank You card. I’ll include a $10 Tim Horton’s gift card that says “this is where us commoners have coffee every day. Enjoy!”

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Sandy Wrote:

I had a rather large line of credit from MBNA. I was late by 2 (TWO) days with a single payment in about 4 years. It happened to be when I had a preferred rate at 4.99% on about $7500 I used for home repairs. My renters moved without notice and trashed the place. When I called in April to say the paperwork shows that rate was to stay in effect til Dec. 12 they argued with me saying I was totally wrong about the date. When I proved I was right, they said “oh yes, I see that now but you were late with a payment so that’s why that rate was cancelled and moved to the MUCH higher one!” So first I was an idiot who had the wrong date. Then I was delinguent on my payment as the back up reason for the 12% increase in interest! Then the rep “warns me” (his words) they are cranking up the overall interest to 19.99% on the total balance. So now that’s a 15% increase. I was right on track to clear the $7500 on schedule in Dec!

I check the agreement yet again and it states I have to miss two consecutive payments to trigger the higher rate. They ignore me request to maintain the preferred rate til Dec. 2012. Then I get another weird notification on my statement that says my current interest rate ends on the August 2012 billing date which is different than what I was previously told. I guess that means the original rate of 16.99% to 19.99%?

Anyway, I reduced payments on my other 2 cards to 1.5 X the minimum and have been adding that to my MBNA card. Anything else I can scrape up goes right to that card even if I have to make 5 payments each month when I round up an extra $50 or so. I’m sure MNBA has noted the fact I have been pushing hard to reduce the debt and taregetted me ASAP to suck as much extra cash as they can before I kiss them off.

When I’m done, I’m going to close my account, chop the card up and send it directly to the President and CEO of TD Canada Trust inside a very nice Thank You card. I’ll include a $10 Tim Horton’s gift card that says “this is where us commoners have coffee every day. Enjoy!”

PS I’ve had a spotless relationship with TD Canada Trust for 12+ years. They wouldn’t offer me a balance transfer to a TD VISA with any introductory offer they had available! My mortgage was paid religiously and beyond the required amount. I have taken out several RSP loans and vehicle loans twice, almost always paid before the deadline of the agreement. My LOC balance is $0.00 Apparently this means NOTHING to them! Thanks TD – I love you too!

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Buck Corrigan Wrote:

MBNA Alaska Airlines credit card services SUCK !!. After writing numerous letters complaining about their lack of online services, I received form letters stating they no longer offered online banking !! Nice work Boys !!

I recently made a large payment to MBNA through my CIBC online bill pay, but paid the wrong MBNA card,..when I contacted MBNA Canadian Geographic to correct the error, they were polite and assured me it could be done no problem. I’ve just received notice from Alaska Airlines MBNA (get this…!) that they cannot transfer the funds between the two accts. because they are the SAME company !! WTF !?

Lack of online banking, lack of customer service,..unbelievable !! Next they’ll try to tell me I owe them interest on the acct.

I love Alaska Airlines, and have previously been happy with my MBNA mastercard. I’ve given these guys hundreds of thousands of dollars worth of business in the past 5 years,..but no longer….!

Treat your customers this way and you’ll be out of business soon !!

Buck Corrigan

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COlin Wrote:

Just got my statement in the mail. I have the same Prestige Platinum Line of Credit – mine with a fixed APR of 6.75% as mentioned above. As of October 2012 they are raising the rates to 9.99% for purchases and 24.99% for cash advances. I plan a very nasty phone call tomorrow, a letter, and to switch if I can find a better alternative. TD=worst bank

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