Balance Transfer

Newbie01

I just did a balance transfer for my Barclaycard to the MBNA platinum card at 0% for 23 months. I have some other small debts, catalogues & such that I would also like to transfer to my MBNA card but I'm not sure if its possible to do this as they aren't credit cards as such...? Does anyone know?

It does say you can transfer funds from the credit card to a current account which i presume I could then use to pay off my catalogues, but the handling fee is 4% rather than 2.85% for the balance transfer.

Am just after some advice really as to the best way to go about this!

Thanks!!

[Deleted User]

The money transfer is the way to pay off anything that can't be done via BT.

If the 4% fee is less than you're going to pay in interest, then it's worth doing.

Newbie01

Yes I think it definitely will be - thanks so much for your quick reply.

One last question! I'm not going to use the card for anything else, will just cut it up. So for repayments, if i add up the total of my transfer & the 2.83% fee plus the money transfer amount & the 4% fee, then divide it up, say by 21 to make sure its paid off in time then make this my monthly repayment amount - i won't incur any interest charges right??? Sorry to sound really thick!

I was also reading about this new minimum repayment law from April 2011. i don't really understand it - will this impact upon my repayments seeing as I'm on 0%?

Thanks in advance!!

[Deleted User]

Yes, roughly, Although there may be a few pence interest to pay on the two fees.

As long as you make at least minimum payments each month (plus a £1 to avoid a min payment marker), you won't incur any interest charges while the debt is at 0%. Up to you how you manage additional payments on top of that. You might want to keep any suplus in the bank to get some interest, but if you'll be tempted to spend it, then yes, divide the total by the 21 months and do it that way.

The allocation of payments rule simply means that your payments go to paying off the debt at the highest rate first. So the fees get paid off first, then the 0% balance. If you were to then spend on the card, your next payment would go to paying off the purchases, as they woudn't be at 0%.

Newbie01

Ah thanks you're so helpful I hadn't thought of doing anything with the surplus. I do have an overdraft though (which I always tend to end up using at the end of the month). So I guess I could also pay that off as well then reduce it right down to avoid re-spending it?? I think I pay about £20 per month every time I use my overdraft so a 4% fee of the total amount should work out a lot less.

I think I'd be too tempted to keep the rest in my current account - but I do have an empty Santander Instant Savers account that I've had for a long time that I could keep it in? Do you have any idea what kind of interest rate savings accounts offer? i wonder if the 4% credit card withdrawl fee would outweigh the interest fee?

[Deleted User]

Getting out of your overdraft for 4% would be worth it. But you don't want to get back in it in order to pay off the card balance at the end of the 0% promo.

So I'd suggest your best plan of action is -

• BT the credit cards
• Do a money transfer to the tune of storecard + catalogue + overdraft
• Pay off minimum plus as much as you can to the card (With everything at 0%) and clear it within the 21 months
• Stay out of your overdraft. If you start getting close to it again, reduce your payments to the card while you're still in the 0% period (but always make at least min payment plus £1).

With the aim that at the end of the 21 months, you have paid off all the debt, not in your overdraft and hopefully some money in the bank.

Newbie01

Good plan! Thanks so much for your help - much appreciated :-)

Shelski_2

Deleted_User wrote: »

Yes, roughly, Although there may be a few pence interest to pay on the two fees.

As long as you make at least minimum payments each month (plus a £1 to avoid a min payment marker), you won't incur any interest charges while the debt is at 0%. Up to you how you manage additional payments on top of that. You might want to keep any suplus in the bank to get some interest, but if you'll be tempted to spend it, then yes, divide the total by the 21 months and do it that way.

The allocation of payments rule simply means that your payments go to paying off the debt at the highest rate first. So the fees get paid off first, then the 0% balance. If you were to then spend on the card, your next payment would go to paying off the purchases, as they woudn't be at 0%.

Hello
Sorry to hijack the thread, but I hadn't heard of a minimum payment marker. Could you give me more information please?
Shelski

YorkshireBoy

Shelski wrote: »

I hadn't heard of a minimum payment marker. Could you give me more information please?

http://www.experian.co.uk/downloads/consumer/YCREJul08.pdf (pages 16-17)

Shelski_2

YorkshireBoy wrote: »

http://www.experian.co.uk/downloads/consumer/YCREJul08.pdf (pages 16-17)

Thank you, have just read the link you posted. I'm assuming that paying the minimum even if you are paying more to a higher interest rate card (trying to snowball) is not a good idea. Hence the advice to pay minimum & £1??

neonplanet40

Just signed up for the MBNA Platinum card today myself. In the application I asked for a balance transfer to my bank account from the credit card. When I got accepted I have been given a bigger limit than I thought I would.

Is it okay to do another transfer when I get my new details from the new card to my bank or are you only allowed to do it once?

Thanks for the help