Balance transferring too much.

Ben1988

Hello,

This is my first post. I tried to find the answer to my question in the forums, but was unsuccessful. Apologies if this has been covered before.

I shall be applying for a 0% Balance transfer credit card soon, so that I can actually start to pay off my Lloyds CC. I'm also currently using my overdraft. My Lloyds CC is currently near it's limit of £1900 and my overdraft is £800.

My question is this: If I were to get a 0% balance transfer card for £3000, what would happen if I transferred the whole amount of £3K to my Lloyds credit card? Would Lloyds allow me to transfer the additional £1100 from my CC into my current account?

I know I'd have to pay transfer fees, but would this not be a cheaper way of getting a 'loan'? Or is this behaviour not allowed by the banks?

I hope that's clear! Thank you very much for your time.

betterdaysahead

Hi Ben. I think you're misunderstanding how balance transfers work. If you get a 0% balance transfer credit card with a limit of £3000 from say Bank1 you can then transfer your balance from your Lloyds CC to Bank1 i.e. they pay off your Lloyds CC and you know owe Bank1. Similarly they will pay off your overdraft and this amount will be added to your new CC. You cannot then draw on the extra £1100 and place it in your current account.

Hope this help,
BDA

YorkshireBoy

Your plan might work.

Some lenders are really keen to discourage large positive balances, whilst others have been very helpful in letting me shift circa £9K positive balances to my current account. Sadly I've no experience of Lloyds though!

The worst that could happen is Lloyds send the extra £1,100 back to "Bank1", meaning you've wasted circa 2% (£55) of this in fees.

A better approach might be to go for an MBNA card which also offers 0% on money transfers as well as BTs. You'd then make two separate transfers...one BT from Lloyds and the other MT from your current account.

On a separate issue, you're currently £2,700 in debt. After your proposed transfers you'll be £3K in debt. That's a backward step isn't it?

Ben1988

Thank you both very much. I'm new to this BT stuff and you've made it clearer. I think I'll keep it simple and see if I can get an MBNA card you mentioned - for just the right amount, and no more!

grumbler

The new card credit limit permitting, you can do two transfers from Lloyds to the new card.
First transfer £1900.
Then withdraw £800 from Lloyds (~3% fee) to pay the overdraft off, and transfer ~£825 more.