Balance transferring - back and forth

MrBernard

Hello All

I've been lurking for some time and have a question about balance transfers. Apologies if it's been asked to death.

Anyway, I have two credit cards:
Card 1 HSBC Balance £2200
Card 2 MBNA Balance £1800

No issue with payments on either and currently whittling them down rapidly. However, both have now offered me 0% deals on balance transfers. So, my thought was to transfer the MBNA to HSBC, and then transfer the whole lot (£4k) back to MBNA because that is the longest offer (May 2012). I can then get it paid in full in about 6 months.

Two questions:

Are MBNA likely to notice me flip-flopping the balance and refuse the transfer or is this a perfectly normal thing to do? I am aware that I'll be charged a fee for both transfers, but it's still worth doing if it's allowed.

Is there a better way of doing this that I haven't noticed?

Many Thanks in advance for any advice

bengalknights

Its a perfectly normal thing to do in fact you might find that MBNA extend the offer even further when they no balance on the card hence allowing you more time to pay debts off.

MrBernard

Many thanks for that - I shall get transferring.

cse

Just be aware that it might take a while for the first balance transfer to be completed - make sure you have enough time to complete the second transfer before the offer deadline closes

Also, if you're planning to pay it off in 6 months, why bother with the second transfer? You're just paying an extra fee to get 6 more months of 0% that you won't use...

[Deleted User]

cse wrote: »

Also, if you're planning to pay it off in 6 months, why bother with the second transfer? You're just paying an extra fee to get 6 more months of 0% that you won't use...

A very good point. And I've just thought of something myself.

Are MBNA also offering the same deal on money transfers (ie to your bank account? In which case you could do a money transfer to your bank account for the amount that you need to clear the HSBC card, and clear it that way.

Then you'd pay one 4% fee instead of two 3% fees.

YorkshireBoy

bengalknights wrote: »

...you might find that MBNA extend the offer even further when they no balance on the card

More than 12 months on an existing customer MBNA repeat deal would be some achievement!

YorkshireBoy

Deleted_User wrote: »

Are MBNA also offering the same deal on money transfers (ie to your bank account? In which case you could do a money transfer to your bank account for the amount that you need to clear the HSBC card, and clear it that way.

Wouldn't that leave £1,800 accruing 18.9%, or whatever, on the MBNA card? Appreciate it would be repaid first, but there's still an ongoing interest cost.

[Deleted User]

Hmm. Oh. Yeah - you're right. I'm a muppet.

The idea came to me in such a blinding flash of brilliance that I should have know it was total bobbins.

YorkshireBoy

OP,

A 3% fee on £1,800 is £54
A 3% fee on £4,054 is £121.62

You say you're repaying "rapidly". How much interest would be charged between now and when you clear the debt (in 6 months)? And bear in mind it'll decrease each month due to the reducing balance.

For example, if you can clear in 6 months then your average debt over that period is £2,000. At 17.9% average that'll incur approx £2,000 x 17.9% / 2 = £179 interest.

So, you have the option of paying £176 in fees or £179 in interest over the 6 month period.

Paying the fees protects you unforseen issues extending the duration, but you run the risk of not getting the transfer to MBNA if they pull it in the interim.

Paying interest instead is only marginally more expensive, depending on your personal rate of course, but you don't have the "will MBNA pull the offer?" worry.

MrBernard

Hello Again

Thanks to all for the replies, apologies for the delay in responding - I've been at work.

Timewise I should be fine because both offers are for transfers before 30th June. The offer is for balance transfers only, and they would apply the 'contracted rate' on any transfer to my current account, otherwise that would be a very good option.

Additionally, YorkshireBoy makes a very good point with regards to the actual saving. With a bit of discipline, I could pay £700-£800 off per month. I shall have to have a closer look at interest charges suring the period vs tranfers costs.

Also, a thought I had is that the interest rates actually give me the incentive to exercise some financial discipline and get this cleared.

Hmmm....I shall have to think.

Thanks again everyone.