Balance transfers - how to go about it?

Kaepora

Hi all!

This is probably a really simple question, coming from a really simple guy :rotfl:

I've been looking into my best options for paying off debt and it seems a credit card and balance transfer are the way forward for me.

I've been looking at the MBNA Credit Card, I've not applied yet so i know there's a chance I'll get rejected but after reading about credit ratings and how they work I think I should be fine.

Ok, if I'm successful I want to transfer my HSBC Loan, Credit Card and overdraft to my new credit card. I'm just not sure on how I would go about doing this! Would I just need to make a payment from the new credit card to these accounts? Or is this classed as a payment rather than a Balance Transfer? As it's "0% interest on balance transfers" I wanted to make sure I'm approaching it in the right way.

Many thanks!

msgnomey

You can ring them up to do it over the phone, you don't just make a payment, you have to ask for a balance transfer

redpete

Most cards only allow you to transfer a balance from another CC, they don't generally allow you to transfer money from the new CC into a 'normal' bank or loan account (I think MBNA do allow you to do this); if they do allow it they often (always?) charge a higher fee than for CC-CC transfer.

MBNA might offer you CC cheques with a 0% interest offer, you could use these to pay into a bank account although again they will incur a higher initial fee.

Note that none of these actually allow you to 'pay off debt' and it is dangerous to consider it as such. They just allow you to transfer the debt from one place to another, you still need to sort out how to pay it off permanently.

pinkarsenalprincess

MBNA, Virgin and Egg will allow a money transfer to your account which effectively just moves your debt on to the card.
I have recently done this and was charged a fee of 1.9% - worked out much cheaper than the £150 a month HSBC were charging me for my overdraft!

Kaepora

You guys can be too helpful sometimes :T

I've worked out my earnings and where I can cut costs and where money is effectively disappearing (bank charges anyone?). I'm aware that it's just shifting my debt rather than paying it off, I had a poor choice of words

Thanks for your help again