Can anyone thing of a drawback to this plan?

elvis86

*think

I am considering transferring my £1300 Natwest overdraft (which I use in full each month) to my new 0% MBNA credit card, and cancelling my overdraft facility.

MBNA will charge a 4% fee (£52) and the 0% deal lasts until May 2012. By my calculations, if I kept my overdraft it would cost me about £225 in interest between now and May 2012, so by doing this I will save about £175.

I will not clear my credit card by May 2012, and anticipate that I will still have a balance of approximately £1500. The only drawback I can see is if I struggle to get a new 0% deal to transfer this balance to? However, I have a good credit rating and have managed to balance transfer 3 times in the last 4 years without any problem.

The only thing I worry about is running out of companies I don't already have cards with (I retain my old cards even though I have nothing on them and don't spend on them)!! Is it better to cancel these cards, and if I cancel a Barclaycard now would I qualify for whatever 0% deal they might be offerring in 15 months time?

ironlady2022

Ok

Drawback to getting rid of overdraft
-If you go over by accident you are looking at very expensive bank charges, sometimes £35 a pop, if you are tempted, then maybe reduce your overdraft down to say £300? It's up to you really.

You have not stated how much you owe on your existing card? Balance transfers are getting harder and harder to come by and as you say companies belong
under the same group. Although you've een successful in the past does not mean it is easily attainable next year, circumstances change beyond our control. In order to improve your rating, unused cards should be cancelled, this will look better on your credit report, and then you can apply for these same companies next year! Cancelling them will reduce your limit to income ratio as although they are unused, in theory you could run the limits right up overnight-this is what the credit cards company do not like. What's the point of applying for new credit when you have unused credit?

Tixy

If you cancelled a barclaycard now you would be treated as a new customer in 15months time (though obviously you may or may not be accepted for 0% at that time depending on all the usual requirements etc).

Alternatively you could keep the BC (or any other open account) and see if they will give you an existing customer 0% deal in 15months time. Depends on what else you might need to apply for in the meantime etc.

stinky_daddy

elvis86 wrote: »

*think

I am considering transferring my £1300 Natwest overdraft (which I use in full each month) to my new 0% MBNA credit card, and cancelling my overdraft facility.

QUOTE]

If you use your O/D facility each month, how will you pay for items - are you planning to use your income (wages) and spend that to avoid dipping into your O/D?

If this is the case, you need a buffer to see you through the initial stages surely?

Confused????

S_D

Work-Shy_2

Hello,

Apologies for hi-jacking this thread and thanks in advance for any advice. I have a similar plan to transfer £2,000 from my MBNA BMI American Express card to clear my Natwest overdraft (offered at 0% until November 2011 with a 4% fee).

The balance on the card is £0.00 (with a very healthy/useful credit limit) and I currently have a direct debit set up to pay off the full balance every month.

How and when is the 4% fee (£80) payable? If I want to exploit the 0% period for 7-6 months, will I need to ammend my direct debit mandate to make the minimum payment (I plan to top up as required in order to clear the full balance before November 2011)?

Bottom Line: How do I "borrow" the £2,000 for the £80 fee without paying any further fees and/or interest?

Thanks Again,

Work-Shy

elvis86

stinky_daddy wrote: »

If you use your O/D facility each month, how will you pay for items - are you planning to use your income (wages) and spend that to avoid dipping into your O/D?

If this is the case, you need a buffer to see you through the initial stages surely?

Confused????

S_D

I am currently fully utilising my overdraft facility, and am very nearly £1300 overdrawn by the time payday comes around each month (then I get paid and am approximately £100 overdrawn).

I am proposing to get MBNA to transfer £1300 to my current account and reduce my overdraft facility to maybe £100 for emergencies/miscalculated direct debits etc.

I have already transferrd £1500 to the MBNA card, so would have £2800 on there in total, approximately £1500 of which would remain by the time the 0% deal ran out.

mayling03 wrote: »

In order to improve your rating, unused cards should be cancelled, this will look better on your credit report, and then you can apply for these same companies next year! Cancelling them will reduce your limit to income ratio as although they are unused, in theory you could run the limits right up overnight-this is what the credit cards company do not like. What's the point of applying for new credit when you have unused credit?

I hear what you're saying. I wasn't aware that it worked like this and that keeping the cards was a bad thing to do. The only reason I have applied for subsequent cards is to transfer my balance when a 0% deal expires.

ironlady2022

elvis86, keeping card isn't a bad thing, but you have already stated that you are unable to finish paying it off by May 2012 which means you need NEW credit. Alternatively like Tixy mentioned, you can leave it open in hope they send you a promotional rate ready for next year.

Soundgirlrocks

Hi I am in the process of doing something similar with my MBNA card, I have £1132 on it which on their standard APR, a overdraft of £850 and a HSBC card with £250. They are offering me 0% balance transfer to a current account. I have £2300 in savings ( I prefer to have a cushion just in case) I have used m savings to pay off the MBNA card once it has cleared I will request a balance transfer to my current account of £ 2199 which will pay off both the overdraft and the HSBC card, leaving me with £1132 to put back into my savings:j. It will cost me £100 but means I won't be paying interest on the O/D or the HSBC card and the balance of the MBNA card! I'll still have my savings cushion, and my debts will be in one place

elvis86

mayling03 wrote: »

elvis86, keeping card isn't a bad thing, but you have already stated that you are unable to finish paying it off by May 2012 which means you need NEW credit. Alternatively like Tixy mentioned, you can leave it open in hope they send you a promotional rate ready for next year.

By May 2012 I anticipate having a balance of approximately £1500 on this new MBNA card, which I will be looking to transfer to a new 0% deal. I think what I will do is cancel my Halifax card (which will have a zero balance upon completion of this balance transfer) and my Natwest card (which has had a zero balance for about 3 years) now, retaining the MBNA card and my Barclaycard, which is 0% until early next year but will be paid off and cancelled by then anyway.:)

Work-Shy_2

BUMP

Does anyone know how and when the 4% fee (£80) is payable? If I want to exploit the 0% period for 7-6 months, will I need to ammend my direct debit mandate to make the minimum payment (I plan to top up as required in order to clear the full balance before November 2011)?

Thanks,

Work-Shy

walzingmatilda

Work-Shy wrote: »

BUMP

Does anyone know h and when the 4% fee (£80) is payable? If I want to exploit the 0% period for 7-6 months, will I need to ammend my direct debit mandate to make the minimum payment (I plan to top up as required in order to clear the full balance before November 2011)?

Thanks,

Work-Shy

It is added to your balanced owed.

So say you want to transfer £1000 with a 4% fee, you will owe £1040.

Thanks