MBNA 0% rate about to end - is money transfer an option for me ???

gavman99

Hi there....I have an MBNA (used to be a virgin card) with a credit limit of £16,900 and an outstanding balance of £8,200 therefore available credit of £8,700. All the balance is on a 0% balance transfer rate.

My 0% balance transfer rate is about to end in 2 weeks time. I have applied for additional cards with other companies to do a new 0% balance transfer but I was refused the 3 cards I applied for, probably down to the loan I took out recently.

I was panicking at the prospect of having to pay the standard interest rate of 17.5% until today when I received a letter offering me 0% for 15 months on new balance transfers (I have no others to make) and also money transfers (4% fee).

Is there anything stopping me doing a money transfer for £8,200 (or whatever the max they allow me to transfer to my bank account) and then use that money to make a normal payment to my card to reduce the £8,200 balance that will start attracting the higher interest in 2 weeks time ?

According to my statement, my payment of £8,200 would be used to clear balances with a higher interest first so I guess as long as I make the payment after my existing 0% rate ends in 2 weeks time, I should be fine......shouldn't I ???

4% fee ain't great but when no other options are available, it's got to be better than 17.5%.

Seems a bit too easy so not sure if I'm missing something ???

All advice appreciated, thanks.

bengal-stripe

gavman99 wrote: »

I was panicking at the prospect of having to pay the standard interest rate of 17.5% until today when I received a letter offering me 0% for 15 months on new balance transfers

Is this an offer aimed at you (from some card, who, currently or in the past, has done business with you) or is it just a generic flyer sent to all and sundry?

If you apply to the card because of any old marketing flyer your chances of rejection are pretty high. Three applications in recent weeks, smells of desperation and you seem to have quite a bit of debt.

So, you know what they say about counting chicken!

knightstyle

Have you checked your credit rating? Just to make sure you are not being refused for something that should not be there.
Plus ask why you have been refused. Another option is to go into a Bank or BS and apply in the branch, you may have to make an appointment but when the computer says no the advisor can sometimes override this. I know this can happen in the Nationwide.

gavman99

This is an offer specifically for me. I am already an MBNA credit card customer and they have offered me a 0% rate on my existing card for all new balance/money transfers until April 2015.

When I log into my online account, its listed under my available promotional rates.

So as I said previously, would this 0% money transfer option allow me to pay off existing debt on the same card at a higher rate ?

gavman99

knightstyle wrote: »

Have you checked your credit rating? Just to make sure you are not being refused for something that should not be there.
Plus ask why you have been refused. Another option is to go into a Bank or BS and apply in the branch, you may have to make an appointment but when the computer says no the advisor can sometimes override this. I know this can happen in the Nationwide.

Thanks, but I'm not questioning why I've been refused credit. I'm asking if the money transfer scenario above would be work.

Cash_Flow

gavman99 wrote: »

Thanks, but I'm not questioning why I've been refused credit. I'm asking if the money transfer scenario above would be work.

Yes it will work, But as you say you need to make sure when you pay the money back onto your credit card that funds are credited towards the previous 0% balance transfer and not the Money transfer.

gavman99

Cash_Flow wrote: »

Yes it will work, But as you say you need to make sure when you pay the money back onto your credit card that funds are credited towards the previous 0% balance transfer and not the Money transfer.

Thanks for that. My statement says payments will be allocated to balances with a higher rate first so I think it should be fine as long as I dont pay the money back until after my previous 0% balance transfer rate has gone in 2 weeks time.

Anyone else got any views on this approach ?

YorkshireBoy

gavman99 wrote: »

Anyone else got any views on this approach ?

If you check your MBNA T&Cs you'll see they cover the issue of having 2 identical rate promotions on your account at the same time.

I seem to remember your payments, in such a case, go towards the promotional rate offer ending first. If this is correct, you're good to go as soon as you get the funds in your current account.

However, and to err on the side of caution, it's probably best to hang on for the sake of a fortnight?

gavman99

YorkshireBoy wrote: »

However, and to err on the side of caution, it's probably best to hang on for the sake of a fortnight?

Agreed. I'll request the money transfer a couple of days before my 0% rate ends, and I'll make the payment to my card a couple of days after the 0% rate ends.

YorkshireBoy

gavman99 wrote: »

I'll request the money transfer a couple of days before my 0% rate ends, and I'll make the payment to my card a couple of days after the 0% rate ends.

You misunderstand me. What if the offer is pulled before you complete?


I'd be taking the money transfer now...then paying it off the card at some future date you're happy with. Yes you'll lose (up to) 2 weeks 0% at the end of the promotional rate period, but a bird in the hand...?

gavman99

YorkshireBoy wrote: »

You misunderstand me. What if the offer is pulled before you complete?


I'd be taking the money transfer now...then paying it off the card at some future date you're happy with. Yes you'll lose (up to) 2 weeks 0% at the end of the promotional rate period, but a bird in the hand...?

Appreciate what you're saying, however the promo offer in my online account says the following :-

Money Transfers To A Current Account - 0.0% until 15 April 2015 on all Money Transfers completed before 28 February 2014. A transfer handling fee will apply of 4.0% of the transaction (minimum of £3.00)

So reading thatm surely it won't be pulled between now and the 28th Feb ? Unless you know differently and have experience of these offers being pulled earlier than expected ?