MBNA Credit Card, worth it?

Ciwan

Hello Guys

My mum just went through the eligibility check for an MBNA card. Their system came back with this:



It states that they couldn't provide us with our first choice, but they can offer the above!

Is this a good card to have? What is this handling fee? and that stuff about 23.9% pa!

We were planning on using this to pay my O/D on my current account and credit card, then pay back monthly with no interest!

Would their offer allow for this?

Any clarification would be greatly appreciated.

Thank You.

SuperHan

Ciwan wrote: »

Hello Guys
Is this a good card to have?

Not sure what your first choice was, but this seems to do what you want.

What is this handling fee?

They will charge you 4% of the amount you transfer to your bank account as a cost for using their service. So, for example, if you transfer £1,000 to your bank account, you will need to pay back £1,040

and that stuff about 23.9% pa!

If you make purchases on the card and don't pay them off in full every month, they will charge you 23.9% interest on them. I highly recommend you don't do this, and you just use the card for the money transfer, as you may end up getting in to a pickle with what is being paid off and what is incurring interest, especially if you don't fully understand credit cards.

We were planning on using this to pay my O/D on my current account and credit card, then pay back monthly with no interest!

Would their offer allow for this?

Yes it will. That's the money transfer bit. You will pay an additional 4% as a charge for anything you transfer though. You will need to pay it all off within 12 months for it to be interest free.


MBNA are known for giving high limits, but you may not be able to transfer all of the limit as a money transfer (they will give you more details about what % they allow), so bear that in mind too.

And as I say above, as it appears that you don't fully understand credit cards, I would make the transfer then keep the card in a drawer and never use it again, and may 1/12 of the amount each month to ensure it's paid off in 12 months. Alternatively, you can make the minimum payment each month and then pay off in a lump sum, whichever works best for you, but make sure you pay off within the 12 months as after that the interest will be at least the 23% quoted, if not more for money transfer balances.

Ciwan

SuperHan wrote: »

MBNA are known for giving high limits, but you may not be able to transfer all of the limit as a money transfer (they will give you more details about what % they allow), so bear that in mind too.

And as I say above, as it appears that you don't fully understand credit cards, I would make the transfer then keep the card in a drawer and never use it again, and may 1/12 of the amount each month to ensure it's paid off in 12 months.

Thank you SuperHan, that is exactly what I'll do. But that bit about the transfer limit worries me, the whole point of me doing this is so that I get rid of the interest on my overdraft.

How high is high? Would they allow 90% transfer? or do we mean 50% when we say high?

And another thing, what sort of paper work would they require? Or is it all done online?

SuperHan

Ciwan wrote: »

How high is high? Would they allow 90% transfer? or do we mean 50% when we say high?

And another thing, what sort of paper work would they require? Or is it all done online?

I'm not sure if it's the same for all customers, but from my money transfer offer online with MBNA:

¹ You can transfer up to 95% of your available credit limit including all fees. Consider all recent transactions, transfer requests, interest and fees which may be deducted from your available credit limit before your next official statement is produced. The maximum amount that you can transfer is shown above - this includes the value of any payments that we've received from you, but which may not be reflected currently in your 'Available for Cash & Purchases' and 'Outstanding Balance' totals.

So we are talking 95%.

Regarding paperwork, you should be able to do it all online.

Anthorn

Ciwan wrote: »

Hello Guys

My mum just went through the eligibility check for an MBNA card. Their system came back with this:



It states that they couldn't provide us with our first choice, but they can offer the above!

Is this a good card to have? What is this handling fee? and that stuff about 23.9% pa!

We were planning on using this to pay my O/D on my current account and credit card, then pay back monthly with no interest!

Would their offer allow for this?

Any clarification would be greatly appreciated.

Thank You.

I'm concerned about the 23.9% APR on purchases but whether that impacts you depends on whether you're going to use it for purchases. It's also going to be 23.9% APR on balance transfers and money transfers after 12 months if you haven't paid them off by then. Personally, I would do my math on my expected useage and compare it with the MBNA low rate card at 6.5% and no fee on balance transfers, money transfers and purchases but no free period.

SuperHan

Anthorn wrote: »

I'm concerned about the 23.9% APR on purchases but whether that impacts you depends on whether you're going to use it for purchases. It's also going to be 23.9% APR on balance transfers and money transfers after 12 months if you haven't paid them off by then. Personally, I would do my math on my expected useage and compare it with the MBNA low rate card at 6.5% and no fee on balance transfers, money transfers and purchases but no free period.

Worth considering, especially as it's likely it will be higher than 23.9% (I have a monthly purchase interest of 1.0199% and money transfers of 1.5976%, so about 50% higher for money transfers).

There is also the option to balance transfer at the end of the 12 months if it's not paid off, but that's dependent on you getting accepted for another card and incurring a c. 3-4% fee on the outstanding balance.

Ciwan

I'm confident I can pay it off in 12 months. My main worry at the moment is the maximum transfer limit, which isn't bad if it is 95%.

SuperHan

Ciwan wrote: »

I'm confident I can pay it off in 12 months. My main worry at the moment is the maximum transfer limit, which isn't bad if it is 95%.

The £1,200 is a standard indicative limit shown in every example, it's highly unlikely this is what will be offered to your mum.

Knowing MBNA, it will be a lot higher than this, so I wouldn't worry too much. Plus - every little helps as I assume there is a % charge on your OD.