MBNA play card

skiv71

Hi,

Just received my card today... and under super balance transfers, it seems they are allowing transfers with 6 months 0% (until 08/01/10) for a fee of 1.5%

My limit is £5000, so i was assuming i could transfer all this...

fee = £75 (not sure how this is paid??)
min repay = 3%

I've put the details into my one account (3.75%) spreadsheet.

I showed the £5000 credit and 5 repayments (starting @ £150).

It appears that the £5000 would save me £0.50 interest a day (from the calcs), so approx £90 over the 6 months deal

But the transaction costs £75 right? So net gain is £15 over 6m 0% period

Have i done this right? £15 over 6 months seems like hard work for nothing.

If this is the case, i'll just use it as a 0% spend card.

Thanks

YorkshireBoy

Plugging your numbers into the stoozing site calculator returns...

Stoozing Profit Prediction

Data entered by the user
Balance to be transferred (pounds)...... 4750
BT card interest rate (%) .............. 0
Introductory period (months) ........... 5
Balance Transfer Fee (%) ............... 1.5
Maximum BT Fee (pounds)................. No Maximum
Min Monthly Payment Type ............... Percentage
Min Monthly Payment Amount (% or pds) .. 1
Savings interest rate (AER %) .......... 3.75
Tax rate ............................... Not taxed or offset

Your Results
Balance Transfer Fee paid (pounds)...... 71.25
Stooz pot balance at end of intro ...... 4585.66
Credit card balance at end of intro .... 4584.96
Gross Profit before tax on interest .... 0.7
Tax on interest to be paid ............. 0
Your Profit (pounds).................... 0.7

Created using the Stoozing Calculator at www.stoozing.com.
Reproduced on Moneysavingexpert with permission.

...and shows you'll make 70p over the intro period.

Maybe best to slow-stooz it into your offset as you're contemplating?


Notes:

I've used 5 months because you probably won't get the full 6 months due to start up/shutdown delays. For example, you've got the card in your hand already and you still haven't decided what to do with it!

The minimum payment is the greater of £25 or 1% of your balance...not 3% as you thought/guessed/assumed.

You can only (S)BT 95% of your limit, so that's £4,750. Depending on the CSA you get on the phone they may include the fee in this 95% figure meaning you'll be SBTing approx 1.5% less than this.

LongTermLurker

skiv71 wrote: »

Hi,

Just received my card today... and under super balance transfers, it seems they are allowing transfers with 6 months 0% (until 08/01/10) for a fee of 1.5%

Have MBNA started to refer to it as an SBT? Or just "transfer to your bank account"?

skiv71

Hi,

Thanks for the replies...

I just got off the phone with them, and confirm it is 1.5% fee for 95% of the limit for 6m 0%.

The fee is absorbed into the debt... so.

£5000, 95% = 4750, fee (1.5%) = £71.25, thus 4678.75 released.

Min payment (1%) = £47.50, then £47.03, £46.55, £46.09, £45.63, then final of £4517.20.

My spreadsheet shows the following: -

interest paid during the year without = £1013.78
interest paid during the year with = £930.11

Saving £83.67.

I'm just confused with how the fee plays into this...

I mean, of the available transfer, they take it out (so i get gross-fee), but i pay back gross.

But my spreadsheet takes this into account...

Is my net gain the £83.67 - £71.25?

Thanks

Neil

YorkshireBoy

Punch your numbers into the calculator linked to in post #2.

What does it show?

skiv71

this is what i got....

Stoozing Profit Prediction

Data entered by the user
Balance to be transferred (pounds)...... 4750
BT card interest rate (%) .............. 0
Introductory period (months) ........... 6
Balance Transfer Fee (%) ............... 1.5
Maximum BT Fee (pounds)................. No Maximum
Min Monthly Payment Type ............... Percentage
Min Monthly Payment Amount (% or pds) .. 1
Savings interest rate (AER %) .......... 3.75
Tax rate ............................... Not taxed or offset

Your Results
Balance Transfer Fee paid (pounds)...... 71.25
Stooz pot balance at end of intro ...... 4553.9
Credit card balance at end of intro .... 4539.11
Gross Profit before tax on interest .... 14.79
Tax on interest to be paid ............. 0
Your Profit (pounds).................... 14.79

i'm not sure this adds up though :-s

they give me 4678.75
during 6 months i pay them back 4750 (loss of 71.25)

for my time, i save 83.67 in interest

net gain = 12.42

seems like a lot of hard work for little gain.

i guess slow stoozing involves transferring the debt to another card when the 6m is UP? (i.e. not 0%)

course i'd have to get another non mbna carD?

YorkshireBoy

skiv71 wrote: »

they give me 4678.75

So why did you enter £4,750 in the calculator then?

during 6 months i pay them back 4750 (loss of 71.25)

Noticed in post #4 you're making 5 minimum payments before the final one. That's not correct is it? You've a full two months before your first payment is due, so you'll only make 4 minimum payments before the final balance payment.

i guess slow stoozing involves transferring the debt to another card when the 6m is UP? (i.e. not 0%)

Either that or just repay from the stooz pot (in this case your offset savings account). BTW, it has 9 months on purchases doesn't it?

course i'd have to get another non mbna carD?

Not necessarily (but it would be best to go elsewhere, yes). It's possible to have up to 5 MBNA run cards. However, you won't be able to BT directly between them. Instead, you'll have to SBT the debt across.

At the end of the day though, you don't need to use a spreadsheet or a profit calculator to see that a 1.5% fee for 6 months equates to 3% for the year. When your mortgage rate is 3.75% you're not going to make/save an awful lot of money. I once stoozed a Mint card for 9/10 months for a £50 return...I wouldn't do it now!