MBNA balance transfer

Cupcake_Girl

I have a large balance on my MBNA card but I'm paying it down albeit slowly as the interest on some of the portions of debt is at the standard rates. I've just noticed a money transfer offer valid until the end of January 2016 that gives me a life of balance interest rate of 4.9% and no transfer handling fee.

The amount available on my card to transfer is £4286. My current debts on the card are £9252 at 15.9% and £1195 at 17.9%. I was wondering if I could transfer the £4286 to my current account and then use my current account to pay £4286 off my MBNA card. If I did this several times, I would then have my current debt at 4.9% for the life of the balance. Is this a reasonable thing to do or should I just call MBNA and ask them to give me the lower interest rate on my balances without having to do transfers?

I really hoped I have explained this properly - it all makes sense in my head!

Consumerist

I assume the money transfer facility is with another card i.e. not with the MBNA. It is unlikely you will be allowed to transfer debt from one MBNA card to another MBNA card.

The money you transfer to your current account will remain as a debt on your money-transfer card until it has been paid off. So you would only be able to do as you suggest if you repaid each transfer before making the next.

Cupcake_Girl

Thank you for your reply, Consumerist.

The money transfer offer is with the same MBNA card (this is my last card to be paid��). I was hoping that I could do a £4000 money transfer to my current account, and then use this to make a £4000 payment to the MBNA card.

This would reduce the balance of the debt at the higher rates by £4000 but I would now owe MBNA £4000 with an interest rate of 4.9%.

My balance owed to MBNA wouldn't change as there isn't a transfer fee to pay, I'm just trying to lower the interest rate on the balance. I thought if I did this a couple of times, I could reduce the interest rate on my full outstanding balance but I'm not sure if MBNA would notice the money transfers and then quick repayments.

Consumerist

As said earlier, MBNA will not normally allow you to transfer a balance between its own cards. In fact, the same is true for most cards.

If your credit file is in good shape (no missed or late payments, etc.) then there is no reason why you can't look for a 0% BT card from another issuer. Try <MSE's Eligibility Checker> to assess your chances. Even if you can transfer only some of the debt to a cheaper or even a 0% rate, it will help settle the debt more cheaply and more quickly.

Make sure you can afford the total repayments so you don't dig yourself more deeply into debt.

Sharon87

That could work if they are all on standard rates as it pays off the highest interest first. I done the reverse the other day, I got offered the same deal alongside a credit limit increase. Before I transferred any balances I had a money transfer still on 0% which I wanted gone. So I paid off the £600 and then done a money transfer back to my bank account - along with more to pay off my overdraft.

May take a week or so to complete as it doesn't happen immediately when you do balance/money transfers and payments.

Cupcake_Girl

Thank you both for your replies.

Consumerist - while I don't have any defaults or late payments, my outstanding balances compared to my salary is extremely high so it's unlikely I would get any other cards. I'm not going to pay this card off within the year so I thought a 4.9% life of balance was a good offer. I asked MBNA to apply this rate to my existing balances but they said no - no harm in asking!

Sharon87 - it's hard to know what to do to take most advantage from the offers.

I've requested a money transfer to my current account which should go through by Tuesday. I will then take this and pay it back to MBNA. I'll see how many times I'm allowed to do this before the end of January when the offer expires. If I can reduce the interest charged on these balance by about £75 a month, that's an extra £75 that will come off balance owed. I'm currently paying about £350 a month and then £170 is added back on in interest - I will continue to pay £350 a month as that's what I've budgeted for repayments. Fingers crossed MBNA don't withdraw the promotional rate!

hylian_elf

Hi,

I was actually wondering the same thing. I am in a similar position... well, much worse. £15k debt at 29.9%, £5k more that could be used, and no one will give me a card to try and transfer balance.

So I was so happy to see the offer from MBNA. My only thought is that you can do it only once. Its an offer so once used, I imagine its gone. But its better than nothing and means I could end up with say £10k at 29.9% and £5k at 4.9%.

The other thing I was thinking is whether I could borrow say £5k or so from a work colleague or someone, and pay off £5k of debt first. That then gives me £10k to use. I then money transfer that £10k to bank account, pay off colleague, and pay £5k back into MBNA. Means I'll then have £5k on 29.9% and £10k on 4.9%! Couldn't find anything in Ts&Cs to prevent me doing that (like some fair use policy or something on offers). But I do wonder whether MBNA would retract/not allow the offer if/when they see that I've made big payment to take advantage of offer.

Any thoughts anyone?

EDIT: just re-read the post by Sharon87... I think I'm thinking (???) of the same thing but on a larger scale...???

Consumerist

hylian_elf wrote: »

. . . Any thoughts anyone?

I must admit I am a little confused about what is expected here. It's not clear to me exactly what this "offer" @ 4.9% is from MBNA. How does the money paid into your bank account and then transferred back to MBNA translate into credit @ 4.9% pa?

glentoran99

Consumerist wrote: »

I must admit I am a little confused about what is expected here. It's not clear to me exactly what this "offer" @ 4.9% is from MBNA. How does the money paid into your bank account and then transferred back to MBNA translate into credit @ 4.9% pa?

OP has a balance transfer offer of 4.9%


Transfer this to bank account,


OP then owes MBNA another 5k at 4.9%


This 5k is paid of credit card, this then comes off the highest interest balance on the card, meaning effectively swapping high interest debt for lower

Consumerist

glentoran99 wrote: »

OP has a balance transfer offer of 4.9%
Transfer this to bank account,
OP then owes MBNA another 5k at 4.9%
This 5k is paid of credit card, this then comes off the highest interest balance on the card, meaning effectively swapping high interest debt for lower

Thanks for that.

I assume you mean money transfer but for how long does the 4.9% pa last. Once the offer period has expired, I assume the rate will revert to their standard money-transfer rate.

Cupcake_Girl

Cupcake_Girl wrote: »

...a money transfer offer valid until the end of January 2016 that gives me a life of balance interest rate of 4.9% and no transfer handling fee.

In the past, when I've used the balance transfer offers, it wasn't a one off thing. Subject to not going over my credit limit, I could do as many transfers as I could manage before the offer ended, in this case January 2016.

Consumerist- apologies if I didn't explain my thoughts clearly (I knew what I wanted to say, just didn't manage to do it clearly!)