MBNA reducing balance on longer 0% first?

Brookside88

Hi,

Hoping somebody can help shed some light on this.

I have an MBNA card with 2 x 0% balance transfers on.

1. Expires 01.08.2018 and the balance is £1,488
2. Expires 20.04.2020 and the balance is £4,700

I was very surprised to see that my last 2 payments have reduced the balance on the longer term one and not paid a penny towards the one that expires first!

Is this right? Surely the payment should go to the offer that ends soonest no?

Many thanks for any advice

[Deleted User]

Brookside88 wrote: »

Surely the payment should go to the offer that ends soonest no?

Surely not.

I believe MBNA allocate payments to the one that has the highest go to rate after the promo ends. But your terms will explain how it works.

Brookside88

Deleted_User wrote: »

Surely not.

I believe MBNA allocate payments to the one that has the highest go to rate after the promo ends. But your terms will explain how it works.

That's annoying. I'd be able to clear both balances by the expiry date but not if they're going to apportion the payments this way.

Thanks for replying

Penelopa.Pitstop

Deleted_User wrote: »

Surely not.

I believe MBNA allocate payments to the one that has the highest go to rate after the promo ends. But your terms will explain how it works.

But OP says both are 0%. See explanation here: https://forums.moneysavingexpert.com/discussion/5697598

[Deleted User]

But MBNA appear not to do it that way. Lenders have different ways of treating it.

It may be the one that starts first, ends first, or the highest go to rate. There is no prescribed or 'correct' way.

molerat

As per the linked thread MBNA allocate to the earliest starting offer if both are at the same promo rate.
As I posted in that thread

It is all clearly stated in the T&Cs booklet. Your statement shows "please see clause 4 of your terms and conditions".

PixelPound

Deleted_User wrote: »

But MBNA appear not to do it that way. Lenders have different ways of treating it.

It may be the one that starts first, ends first, or the highest go to rate. There is no prescribed or 'correct' way.

I had two 0% on mine and the one that was taken out first was deducted first. The rates page of statements tell you when each promotional rate was from.

Ben8282

Assuming that transfer 1 was taken before transfer 2 and that both transfers had actually appeared on a statement when the payments were made, then this doesn't seem right. Suggest you call MBNA and question what has happened.

PixelPound

T&C on my MBNA card includes the following:

if your account has two or more promotional rates which are the same:
* we will first pay off the part of the balance that has the earliest promotional rate start date;
* if the promotional rates have the same start date, we will then pay off the part which will
be charged at the highest standard rate at the end of the promotional period.
we will then apply your payment to balance transfers, cash advances, money transfers and
then card purchases, in that order.

So it is the START date that matters, nowhere does it say that the end date is used as a factor for determining payments.. MBNA will always have promo rates - they gave me a BT promotion for 30 months a while ago and keep offering 1 year BT/MT deals now. So if I had taken out a shorter deal afterwards, they would have rightly deducted all payments from the 0% promotion that ends later because it was taken out earlier. If they were taken out on the same date then it also covers that (When I took out my long BT there was also a shorter MT offer) if one of the transfers is actually a MT.

The OP may want to put money into savings until the shorter transfer expires and immediately pay it off. This way you would only incur 1 or 2 days of interest on that balance because of how MBNA use payments, again from the T&C

We will allocate your payment towards paying off amounts that are charged at higher interest rates before those that are charged at lower interest rates (including amounts added to your account
after your statement date up to the date your payment is credited to your account).

So long as payment was made after the promotion expires, no need to wait until the next statement date.

Brookside88

Thanks all.


Have looked into it and the larger balance with the longer promotional period was the one that I took out first. I presumed (naively probably) that they'd reduce the balance on the offer ending soonest. Sounds stupid now I think about it because they wouldn't make any money from me that way.


I'm paying £500ish off it a month so hopefully will have made a good dent in it and then will have to do another balance transfer.


Appreciate your responses