Balance transfer between two credit cards - question?

ellives

I have a virgin mbna card with an attractive balance transfer offer and another cap one card with no such offer.

However, the cap one card has no spend on it, the other card has.

Could I transfer the balance to cap ones from mbna and then use the attractive transfer rate to transfer it swiftly back to the mbna card?

I'm wondering if mbna will realise that it is recycled money rather than new money?

Hope you follow my drift!

rolls99

The problems are:


1) Fee for each "Transfer".
2) You would put the Cap one in credit; OK now and then, maybe not so OK for a significant amount and there's a chance the transfer might not go through, or be returned leaving you paying a potential fee for no reason.


In theory however, if you had two credit cards, with a balance on one, and not on another, and the empty one offered you a 0% deal, then you could transfer to it from the interest bearing card, and if, later, the other card (now with a much lower balance) offered you a better 0% then you could basically transfer between the cards to your heart's content - but of course each transfer will normally have a fee.


The main problem here is with no balance on your Cap one....

chattychappy

Yes you can, and the cards won't mind. You will be paying a balance transfer fee to both of them.

So that's what you have to consider. If say you are paying 3% fee to Cap One and 4% to MBNA, that's 7%. If you are currently paying APR 26%, that's about 1%/month. So don't transfer anything that you can pay off within the next few months.

Perhaps consider applying for a new CC so you only need to pay one fee.

chattychappy

rolls99 wrote: »

The main problem here is with no balance on your Cap one....

I think one of us misunderstood.

My interpretation was that the OP has:

1) MBNA: A good offer and a balance
2) CapOne: No offer and no balance

The problem is that he/she is on standard interest on the MBNA balance. So the idea is to transfer the balance to CapOne, clearing the MBNA balance. Then transfer to back to get the MBNA offer.

ellives

First of all thank you for responding.

Virgin mnba has a 4.9% interest for the life of the borrowing with no additional transfer fee offer but that's where the balance lies (£13k)!

Cap One has no offer just standard rate but I have no balance on this card and a £21k limit so can accommodate the transfer.

My concerns are:

Might Virgin mnba cotton on that I've transferred £13k from a standard c20% borrow rate environment and 10 days later transferred a similar sum back in at 4.9%? I'm assuming that they could refuse the transfer request?

I'm assuming that cap one will accept my transfer from mnba of £13k (at standard rate) onto their card because it is well below the limit - is this assumption reasonable?

What will it cost me in fees to transfer it to cap one and have it sit there for a fortnight prior to successfully (?) transferring it back to mnba (standard rate of c20%)?

Please chip in...

chattychappy

ellives wrote: »

Might Virgin cotton on that I've transferred £13k from a 20% borrow rate environment and 10 days later transferred a similar sum back in at 4.9%?

They won't worry. Once you've transferred the balance away, they are making nothing anymore. They'll be very happy to re-lend to you at 4.9% APR and the fee.

Of course, offers can be withdrawn. But if it is, it won't be because you've upset them - more likely coincidence or some other reason.

ellives wrote: »

What will it cost me to transfer it to cap one for a fortnight with no special rate - presumably about 1% of the transfer amount?

No no no!

For a BT, there are two elements. The fee and the interest rate. You must check the fee. It will probably be 3% to 5%. (Most charge 3%, but MBNA sometimes charge as much as 5%.) This is a FIXED AMOUNT applied immediately regardless of how long you intend to take up the offer for. Interest is then applied on top at whatever the promo rate is. The best promo deals are 0%.

Based on what you've said so far, you'll pay:

3% fee (you need to check) for the transfer to CapOne
0.5% - 2 weeks' interest on CapOne (assuming APR 26%)
4% fee (you need to check) for the transfer back to MBNA.

Total cost: 7.5% (I'm ignoring the tiny effects of compounding).

So you MUST check the BT fees on both cards and the APR you are currently paying on MBNA to make an informed decision.

ellives

What a fabulous service you provide - sincerely thank you.

mbna states it is "4.9% pa on balance and money trnsfers for life of the balance with no handling fee."

I make that c3.5% as there is no transfer fee (you indicated 4% in your last message) to pay. Approx. £455.

I know this is not a perfect arrangement and if I had cash I'd use it to pay it off. However, 4.9% plus the initial outlay is better than it being hit by standars fee each month.

I have not considered applying for an additional card (0% etc) as while my credit rating is good, it isn't perfect and I do not wish to jeopardise it and suspect the credit limit offered may not be want I's need to complete this project...

I need to find out what the trnsfer fee is with cap one now!

rolls99

chattychappy wrote: »

I think one of us misunderstood.

My interpretation was that the OP has:

1) MBNA: A good offer and a balance
2) CapOne: No offer and no balance

quite right - my mistake getting the BT 'reversed' !

chattychappy

ellives wrote: »

mbna states it is "4.9% pa on balance and money trnsfers for life of the balance with no handling fee."

I make that c3.5% as there is no transfer fee (you indicated 4% in your last message) to pay.

Oh then that's a good offer. I haven't seen a deal like that on my MBNA for a while. Yep, your maths is right, then.

ellives wrote: »

I have not considered applying for an additional card (0% etc) as while my credit rating is good, it isn't perfect and I do not wish to jeopardise it and suspect the credit limit offered may not be want I's need to complete this project...

I wouldn't let the credit rating tail wag the money management dog. Only the fact of a search is recorded, not the outcome. A couple of searches are fine and after 6 months become unimportant. There is nothing "naughty" in applying for credit. It's not like missing payments or being maxed out. Indeed if successful, some might argue that your rating might improve - you're borrowings will be about the same, but your utilisation ratio will have reduced.

So I'd fire off a couple (and I mean a couple) of applications to non-MBNA cards for long 0% deals and see what happens. If you're rejected, nothing lost. If you're successful and don't get enough limit, well, you're still quids in to the extent of the saved interest on the amount you were able to transfer. MSE has an eligibility checker which does a "soft search" which might give you an idea of your chances of acceptance. It's not 100% though.

Dobbibill

ellives wrote: »

I have a virgin mbna card with an attractive balance transfer offer and another cap one card with no such offer.

Before you go applying here and there, have you thought about asking Cap1 if they have any offers on. Just because they haven't sent you any marketing about it, doesn't mean they don't have any.

It's worth asking.....if they say no, nothing lost, if they say yes, it will save you applying elsewhere or shuffling it about.

ellives

Thank you both. Excellent advice. I have written to cap one to do just as you suggest Dobbibill.

I appreciate your interst - have a great weekend.