mixed messages mbna / virgin & so your advice please

Milltowngirl

Trying to tackle my credit card debts and so phoned mbna, where I had the largest balance and highest interest rate. Explained after a 2-3 yr period of no wage increases I was due an increase later this year and with cutting back of other expenditure, I was hoping to start repaying debt faster (had only been making minimum payments for a while). To help me, could they reduce or fix interest so interest rates didnt get any higher so that I could make more inroads on paying off my balance. Not surprisingly the answer was no, they couldnt do anything other than a DMP if I was struggling, which I dont want. And, because I had phoned them to discuss account they were also going to reduce my credit limit, in effect taking off any spare limit on the card !! I wasnt bothered because havent spent on it in ages and as I say I want to repay not spend more but anyway, wasnt very helpful ! Guess I didnt really expect anything else, particulary from mbna !

So, straight away, I phoned my other 3 credit cards and maxed them out making balance transfers at lower rates to clear all but about £200 of the mbna balance, which I should be able to clear this month.

Anyway, about 24 hours after the balance transfers reached mbna, I had a phone call from them offering me a balance transfer rate of 0% for 9 months !! Now, as the first woman seemed concerned about my balance and wanted to reduce my limit, you would think they would have thought twice about trying to get me put large balances on the card again ??! Or not I suppose because they are assuming I wont repay in 9 months and theyll get some more interest out of me, but it doesnt quite ring true with the "in the interests of responsible lending" speech the first woman gave me !!

He didnt mention a fee - think I remember reading its 5% with them these days - but I figured even taking this into account id be getting the equivalent of say 6 mths interest free and so Im thinking of transferring something back to them, even though I swore Id close the account and never use them again after the first conversation, lol ! He's phoning me back tonight, a phone only offer seemingly. Do you think id get a better / longer deal if I waited a couple of months with a nil balance on the card ? Ive heard some people on here mention 13 month deals ?

But just to check, would I be right in thinking that even with a 5% fee that 0% for 9 months is say better than a standards rate of 26%, the highest rate Ive got a balance on at the moment ??? Cos, I figure its the equivalent of about 2.5 months interest, is that right so youre still saving with say 6% interest free compared with paying interet for 6 months if you left the balance on other cards ?

Also, my card with a 26% rate is currently offering 0% for 6 months, so once Ive repaid the higher rate balance on this card - and I believe the rules have changed now so a balance transfer onto this card would repay the 26% balance before any of the 0% balance ? - I could transfer something from my next card (19.9%) card onto this and effectively get most of my debt on 0% if only for 6-9 months, at least then most of the repayments are going off the balance and not just to paying off the interest ?

Is this the best thing to do, despite the balance transfer fees these days, which kind of cancels out some of the benefit of the 0% deals ? and then revist everything again in 6 months time to see whether I can reshuffle anything else then ?

Because Ive got myself into a bit of a mess letting my credit card debts escalate, Im doubting myself a bit, and wondering whether this is the best thing to do or whether im missing something / misunderstanding something, so would appreciate any advice !

Thanks

redpete

There's too much in the post to really sort out what the question is but...

1. 5% fee for 9 months interest free BT is better than continuing to pay 26% interest.

2. Relying on 0% BT deals is not a long term way to deal with debt but it can help in the short term.

Milltowngirl

Thanks for the reply Redpete. Sorry if I said too much, I always do go on a bit :rotfl:

Im not sure what your second point means about 0% not being a long term option ? I mean, if you keep doing 0% BT deals whilst throwing all available cash at the balances, is this not the best thing to do ?

Ive finally revealed the true level of my debt to my partner. Ive stopped spending on the cards, we've cut back on all non essentials and any savings from this are being thrown at the cards. Ive a pay rise due in Aug, plus Im seeking a second job to give more income to pay onto them. Ive worked out that by the end of the year we could be paying £1K per month to the cards, total bal c £21K. So I figured the best thing to do was, alongside this, try and reduce the interest rates on the balances to 0% or as low as possible, so that this £1k per month has the most impact ?

What else could I be doing that would be better ? Any suggestions would be welcome

redpete

Milltowngirl wrote: »

Im not sure what your second point means about 0% not being a long term option ? I mean, if you keep doing 0% BT deals whilst throwing all available cash at the balances, is this not the best thing to do ?

It's the second bit that's important and well done for doing everything you are to pay off the balances.

Some people seem to think that just getting repeated 0% BT offers will be the answer; but of course if you are not piling cash into the balances regularly you will still owe the same and you might find the offers will dry up and leave you short.

If you get to the stage where you are looking at, say, 3% fee for 9 months BT offer and the highest rate you are paying on existing balances is, say, 8% then I probably wouldn't bother. It's not worth the added hassle of paying off another card and making sure you don't miss a payment or forget when the offer ends.

anyusernameleft

Stay away from MBNA! Pay off your £200 and close the account.

If you want a 0% deal look at a decent lender like Nationwide.

SCO

anyusernameleft wrote: »

Stay away from MBNA! Pay off your £200 and close the account.

If you want a 0% deal look at a decent lender like Nationwide.

Nationwide very hard to get. Try a lender like Creation or RBS tend to be less picky.