Balance transfer and which one paid off first - MBNA

[Deleted User]

Currently got a 0% deal for £2000 with MBNA which ends in March. Plan is to pay this off in MArch before I start paying interest.

They've offered me another 0% deal until October. Now I do have another £2000 on another card which would be nice to shift onto this.

Trouble is I was thinking. If I transfer £2000 now, I'll have £4000 on there, £2000 which is 0% until March, and £2000 which is 0% until October. If I pay off £2000 just before March, which £2000 will be paid? I've got a sneaky feeling they might pay off my October £2000..... :-(

Of course, I guess I could wait until just after MArch when I'll have £2000 on normal apr and £2000 on 0% till October.

Am I right in saying that now all payments for credit cards must pay off the highest rate first now? If so, in this case, the £2000 for March would be paid, leaving my october 0% alone. The only problem is I would pay a little interest on the march money then.

Anyone else been in similar situation?

Jigga

According to the allocation of payments section in the MBNA T&Cs:
https://wwwa.mbna.co.uk/apply/UKCCapp/Ctl/link?eid=FFFD1D8B

if you did the new BT it should be the March money that gets paid first as it states:

“If two or more introductory rates have the same interest rate then we will repay:

the one with the earliest start date; if the start dates are the same then we will repay the one with the highest standard rate.”

So go ahead and take the deal.

david39

That's correct - and after the first one passes its 0% period and starts attracting interest, it will be that one to which your repayments will be allocated.

Your interest-bearing loan will reduce each month while your 0% loan will remain at its starting value.

This is a recent change in their terms and means that no longer will you have the problem of payments being allocated to the lowest-interest loan and leaving the high interest part of the loan untouched and increasing because of the compound-interest that is added to it.

[Deleted User]

Jigga wrote: »

According to the allocation of payments section in the MBNA T&Cs:
https://wwwa.mbna.co.uk/apply/UKCCapp/Ctl/link?eid=FFFD1D8B

if you did the new BT it should be the March money that gets paid first as it states:

“If two or more introductory rates have the same interest rate then we will repay:

the one with the earliest start date; if the start dates are the same then we will repay the one with the highest standard rate.”

So go ahead and take the deal.

Excellent news !!