Please advise on balance transfer

Silaqui

Hi there,

I had a letter today from MBNA offering 0% on balance transfers untill December 2010.

I currently have around £1750 debt on this card which I am paying off, this debt is at a rate of 34.9% (:eek: I know).

I also have an overdraft of £600 in an old Barclays account which costs me £7 per month in account fees, and about £3-5 in interest per month.

At the moment, I pay £100 per month off the overdraft, and then pay the minimum payment along with as much extra as I can afford throughout the month to the MBNA card.

I had a fleeting thought about transferring the OD onto the MBNA card at 0%, in order to just be able to pay as much as possible to that card each month. This will cost me a fee of £18 (3%) but I'm not sure if it would be better to do this, or keep it as it is. I know you should never ever spend on a bt card - but does the same rule apply if you have spent on it before, and then BT it? Will my high interest debt still get 'trapped' under the 0%?

What would you do? Any advice or alternatives would be gratefully received, I am having a bit of a money mental block at the moment!

Thanks in advance!

angelicmary85

Hi Silaqui,

The card will be costing you more per month in interest so would it be better to pay the £100 off the card every month (excluding the min payment) and 'not bother' so much with the overdraft.

CC companies usually pay off the cheapest debt 1st so I'm guessing that the OD will get paid 1st therefore extending the life of the balance that's already on there.

CannyJock

You need to transfer the £1750 debt off of the card BEFORE you take them up on any BT offer.

So you should be looking to:
1. Transfer MBNA balance to .... anywhere - amount to transfer should be balance + previous months' interest (assuming you're no longer spending on the card).
2. Get a nil statement on MBNA card
3. Transfer balance from anywhere back to MBNA

You'll get two balance transfer fees, but has to be cheaper than 34.9%

EDIT: Overdraft cost is say £12 per month. So £144 per year, so roughly 24% on £600 - so still less than 34.9%. You need to be paying every penny to your card. I'd even be tempted to use any unused part of the overdraft to pay to the card

Silaqui

Hi Cannyjock,

I would transfer the balance off and back, but unfortunately I have nowhere to transfer it to! I tried not long before Christmas to apply for a 0% card but no joy so I don't think thats an option. My overdraft is a maximum of £1000 so can't move it there either.

Mary, the £100 is being paid off the OD because it has to be paid off by September, it's an old student od - haven't been a student for 4 years :eek: (I know the numbers don't add up there - I do extra work in June so will use the income from that to finish it off). I make my PADs to the card though

So it looks like in the circumstances I'm best off sticking to what I'm already doing, I was wondering if anyone could spot anything that I'd missed but it seems not!

Thanks for the help and replies!

angelicmary85

Silaqui wrote: »

So it looks like in the circumstances I'm best off sticking to what I'm already doing, I was wondering if anyone could spot anything that I'd missed but it seems not!

Thanks for the help and replies!

I've had to stop myself using those BT 'offers' that come through the door on a regular basis from MBNA - they aren't all they're cracked up to be!!

CannyJock

Silaqui wrote: »

I would transfer the balance off and back, but unfortunately I have nowhere to transfer it to!

The card doesn't have to be yours, if friends or family can help, you may have another option.