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Stoozing with MBNA money transfer card

Hi,

Just thinking the transfer fee is 1.94% for 0% for 2 years and Santander is paying me 3% a year. Can apply, transfer then earn interest and pay off in two years time. Will make circa 4% on their money.

Is anybody doing this on here? Do MBNA give you a healthy credit limit?

Ash

Comments

  • grumbler
    grumbler Posts: 58,629 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    ash82 wrote: »
    Will make circa 4% on their money.
    Do you not pay the tax?
    Is anybody doing this on here?
    Not as many as 10 years ago, when the rates were much higher and BT fees were rare, but still there are some.
  • ash82
    ash82 Posts: 13 Forumite
    Eighth Anniversary Combo Breaker First Post
    Yeah, I pay 20% tax so that's still 3.2% on the money unless I've missed something?
  • YorkshireBoy
    YorkshireBoy Posts: 31,541 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    edited 19 April 2015 pm30 2:49PM
    ash82 wrote: »
    Will make circa 4% on their money.
    I think your expectations are a little high?...
    Stoozing Profit Prediction

    Data entered by the user
    Balance to be transferred (pounds)...... 10000
    BT card interest rate (%) .............. 0
    Introductory period (months) ........... 24
    Balance Transfer Fee (%) ............... 1.94
    Maximum BT Fee (pounds)................. No Maximum
    Min Monthly Payment Type ............... Percentage
    Min Monthly Payment Amount (% or pds) .. 1
    Savings interest rate (AER %) .......... 3
    Tax rate ............................... Basic Rate

    Your Results
    Balance Transfer Fee paid (pounds)...... 194
    Stooz pot balance at end of intro ...... 8358.44
    Credit card balance at end of intro .... 8009.2
    Gross Profit before tax on interest .... 349.23
    Tax on interest to be paid ............. 108.65
    Your Profit (pounds).................... 240.59


    Created using the Stoozing Calculator at www.stoozing.com.
    Reproduced on Moneysavingexpert with permission.


    http://stoozing.com/calculator/stoozcalc.php
    Looks like 2.4% to me.
  • YorkshireBoy
    YorkshireBoy Posts: 31,541 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    But why are you paying a fee in the first place?

    MBNA have a card offering fee-free money transfers. It's not 0%, but there are at least 3 other card providers out there who are offering 0% fee-free BTs.

    So create a debt on MBNA, repay it with a BT to one of the 3.
    Rinse and repeat...twice!

    I think you'll agree the outcome now looks much better at 4.35%...
    Stoozing Profit Prediction

    Data entered by the user
    Balance to be transferred (pounds)...... 10000
    BT card interest rate (%) .............. 0
    Introductory period (months) ........... 24
    Balance Transfer Fee (%) ............... 0
    Maximum BT Fee (pounds)................. No Maximum
    Min Monthly Payment Type ............... Percentage
    Min Monthly Payment Amount (% or pds) .. 1
    Savings interest rate (AER %) .......... 3
    Tax rate ............................... Basic Rate

    Your Results
    Balance Transfer Fee paid (pounds)...... 0
    Stooz pot balance at end of intro ...... 8401.27
    Credit card balance at end of intro .... 7856.78
    Gross Profit before tax on interest .... 544.49
    Tax on interest to be paid ............. 108.9
    Your Profit (pounds).................... 435.59


    Created using the Stoozing Calculator at www.stoozing.com.
    Reproduced on Moneysavingexpert with permission.
    :D
  • Plus of course you have to have £2000+ to get the 3%. So that is £2k tied up not earning interest? May not be a problem if you already have funds in there and the stooze is just a top up. (which for people with smaller amounts could be earning 5% with TSB)
    £1000 Emergency fund No90 £1000/1000
    LBM 28/1/15 total debt - [STRIKE]£23,410[/STRIKE] 24/3/16 total debt - £7,298
    !
  • YorkshireBoy
    YorkshireBoy Posts: 31,541 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Its £3K+ for 3% AER.

    A very low credit limit would seriously impact profit percentage due to the £25 minimum payment for balances under £2.5K
  • SuzieSue
    SuzieSue Posts: 4,099 Forumite
    Part of the Furniture 1,000 Posts Name Dropper I've been Money Tipped!
    Plus of course you have to have £2000+ to get the 3%. So that is £2k tied up not earning interest? May not be a problem if you already have funds in there and the stooze is just a top up. (which for people with smaller amounts could be earning 5% with TSB)

    I'm pretty sure you earn 3% on the whole amount as long as you have over £3,000.
  • SuzieSue wrote: »
    I'm pretty sure you earn 3% on the whole amount as long as you have over £3,000.

    ah ok ty. i didnt realise that.
    £1000 Emergency fund No90 £1000/1000
    LBM 28/1/15 total debt - [STRIKE]£23,410[/STRIKE] 24/3/16 total debt - £7,298
    !
  • ricky_v
    ricky_v Posts: 330 Forumite
    Part of the Furniture 100 Posts Combo Breaker
    Hi,

    Just thinking the transfer fee is 1.94% for 0% for 2 years and Santander is paying me 3% a year.

    Put the money in a TSB classic plus, Nationwide flex direct and Club Lloyds account. That's £4.5k at 5% gross (£2.5k at 5% for 1 year) and £5k at 4% gross. There needs to be various SO's and DD's to be set up. Once they're done just leave the accounts to earn interest.
  • ash82 wrote: »
    Hi,

    Just thinking the transfer fee is 1.94% for 0% for 2 years and Santander is paying me 3% a year. Can apply, transfer then earn interest and pay off in two years time. Will make circa 4% on their money.

    Is anybody doing this on here? Do MBNA give you a healthy credit limit?

    Ash

    Yes I'm doing this. I reckoned it was just about worth it being as the lowest rate I earn on my savings is 2.5% NETT. I achieve this interest rate through utilising TSB/Club Lloyds/First Direct Regular savers for myself and my wife plus a Coventry Building Society ISA which is only available to longstanding members. MBNA gave me a credit limit just under £10k which I thought was pretty good considering the other cards I've got.
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