Good deal for users as cards are shuffled off again?

Abbey National's 500,000 credit cardholders might not be too pleased to discover they have been off- loaded on to a US-based card company which has come under fire for failing to sign up to the banking industry's code of practice.

But the good news is that, after the intervention of a banking watchdog, these people will continue to be protected by the code, which lays down minimum standards that banks and card companies must meet.

Nevertheless, some cardholders may decide that now is the time to switch to another provider. So, it's no surprise that rival card issuers, including Egg, have already started making a play for any disgruntled Abbey cardholders out there.

Abbey National this week announced that MBNA has bought its existing credit card customer base for £289m. The sale formed part of a deal that will see MBNA developing a new range of Abbey National-branded cards including cashback and platinum products.

Abbey says the link-up will deliver "more choice" and "better value" to its customers, and adds that MBNA's "ability to provide excellent service to our customers was the primary reason we chose them as a partner".

But while there was lots in the press release about the new cards that are planned, there was hardly any mention of how the deal will affect the half a million existing Abbey cardholders.

When asked about this, a spokesman for the bank says these people "should not worry" as the change in ownership should be seamless as far as they are concerned. Their cards and statements will continue to be branded Abbey National and the terms and conditions they signed up to will remain unchanged for the moment.

"They [the fees and charges] will not immediately reflect MBNA's charging structure," adds the spokes-man, while MBNA says: "Customers will be advised in due course of any change that may affect their accounts."

This suggests the terms and conditions could well be amended at a later date, which is both good news and bad news. Abbey currently imposes an annual fee of £9.50 if a cardholder does not have one of its bank accounts, while MBNA does not charge anyone an annual fee, so if everyone moved over to MBNA's terms and conditions they would presumably see their annual fee abolished.

MBNA's standard annual percentage rate (APR) for purchases is also slightly lower - 16.9 APR compared with Abbey's 18.9 APR - and in addition, MBNA offers customers 59 days' interest-free credit compared with Abbey's 49.

But on the other hand, MBNA's fees and charges tend to be higher. It imposes a hefty £18 fee for late payment, and charges the same amount if you exceed your credit limit. Abbey's fee in each case is £12.

However, the biggest downside looked like being that the Abbey cardholders were going to lose the protection offered by the banking code of practice because MBNA has refused to sign up to this (Abbey is a subscriber).

The latest version of the voluntary code came into force in January and it commits those who subscribe to making sure their terms and conditions are fair and set out "clearly and in plain language". It also means they must consider cases of finan cial hardship sympathetically, and correct mistakes and handle complaints quickly. Every company that signs up to the code must belong to either the banking ombudsman scheme or another independent complaints-handling scheme so people's gripes can be dealt with properly.

Things didn't look good in that MBNA doesn't seem to have any plans to sign up to the code - but the Banking Code Standards Board, the body which polices the banks and punishes any company that falls out of line, has ridden to the rescue. It has told Abbey that even though it has sold its credit card business, because the cards will continue to carry its name they must carry on being covered by the code.

"The customer is entitled to think this is an Abbey National product. As Abbey National is a subscriber, those cardholders must also be cov ered by the banking code," says Seymour Fortescue, who runs the board.

If despite this you're thinking about ditching your Abbey card, Egg is one of the companies that was laying out the welcome mat this week. Egg says it is extending its special six-month 0% balance transfer rate offer to all new customers who apply for one of its cards before April 30.

"The extension is intended to give Abbey National credit card customers, who are perhaps unhappy with being migrated by the bank to MBNA, the opportunity to apply and instantly begin to save money," says a spokesman.

Egg's rate on purchases is a competitive 11.9 APR and you can earn up to 2% cashback on your spending. But the card has to be applied for and managed online so it won't suit everyone.