Will taking up new offer affect existing one?

lmb1987

Hello everyone

I am coming up to the end of 0% interest on my barclaycard and still have a few grand left on there. I also have an MBNA card which is offering 0% on balance transfers until December 2020, but I do currently have a few grand left on there which was a 0% offer on money transfers, which I used to by my van. Will doing a balance transfer from my barclaycard to my mbna card affect the existing offer that I used?

Thanks
Lee

[Deleted User]

It shouldn’t no

Ask MBNA

tlc678910

Hi,
Taking a new offer shouldn’t affect the old offer on your card as long as you do the usual like stay within the credit limit and make your minimum payment on time.

There is a trap to look out for though. The order that your transfers are paid. (Caveat - please check anything I say that you rely on)

I think all cards have to pay off the more expensive debt first. Let’s say you have a thousand pounds and 2 months left on your 0% offer but take a 6.9% life of balance offer for a further thousand. When your payment is due and you pay £1000 your payment will pay off the 6.9% as it is higher interest and your 0% offer will remain and in two months when it expires go to 20% odd.

When you have more than one offer at the same rate e.g. 0% some companies take your payments not towards the offer that ends first but the offer that was taken out first. What this means for you: if you took a 3 year 0% offer card to buy your van and have 2 years offer left and 2k left owing. You then take a new 2k 0% offer for 12 months. If your payments go to the offer taken first they will go to the original debt and in 12 months the new offer will expire and go to 20% odd interest.

What you need to do in this case is save up the money while your card is 0% then when the 12 month offer taken second expires and becomes 20% (check) then pay it off. Obviously you have to resist spending what you have saved to pay the card.

If you look carefully at your statement it should detail the balances of the different promotions each month so you can keep an eye on which is reducing and are not caught out.

Tlc

Edit: looking at this thread
https://forums.moneysavingexpert.com/discussion/4989994/beware-mbnas-allocation-of-payments
Looks like mbna do allocate payments to offers TAKEN first rather than ending first when the interest rate is the same.

“
4 Payment allocation
4.1 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).
4.2 If we charge interest at the same rate on different parts of your balance, we will allocate your payment as follows:
• if your account has a promotional rate and a standard rate which are the same, then we will first pay that part of the balance on which we charge interest at the promotional rate;
• 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.

lmb1987

That's very helpful information, thanks for your help tlc, merry Christmas