MBNA Rethinks 0% Strategy
WILMINGTON, Del. - (04/25/05) -- Credit card giant MBNA Corp. Said itis considering reintroducing 0% teaser offers, among other things,after first quarter profits plunged 94% to just $31.7 million, ortwo cents a share. The fall in earnings was due mainly a $767.6million restructuring charge and unexpectedly high repaymentvolumes as cardholders continued to take out equity from theirhomes to pay off card debt, the company said. The higher paymentsreduced managed loans more than in recent years, especially onhigher-interest loans. To combat the situation, a company officialsaid last week MBNA is considering brining back its 0% teaser rateto entice cardholders to consolidate their debt with the cardgiant. Total managed loans for the nation's biggest credit cardbank declined for the first time in several years to $116.6 billionat the end of the first quarter, down $1 billion from a yearearlier.