Balance Transfers -- Am I doing this right?

ChrisLV

I've looked through my CC terms and conditions to try to figure this out, but I'm still uncertain. I've currently got the following situation:

- MBNA Card – Currently at £1.4k at full interest; I have a current 0% balance transfer offer on this card.

- Virgin Card – Currently at £8.6k at full interest; I have a current 0% balance transfer offer on this card.

- Barclaycard – Currently at £5.1k at full interest; I do not have a current 0% transfer offer on this card.

 

I want to perform the following bit of acrobatics, with all the steps happening within a few days of each other:

- First, pay off the MBNA card in full before the next statement date or due date.

- Then, transfer my Virgin balance to the MBNA card using my 0% balance transfer offer, before the next statement date (or due date) of either card.

- Finally, as soon as the balance transfer above has gone through, transfer my full Barclaycard balance to my Virgin card using my 0% offer, again before the next statement date (or due date) of either card.

 

My understanding is that all my debt should then be at 0%, and I can’t find anything in the terms and conditions to contradict that. On the other hand, I’m bad at missing little things in terms and conditions, so I just want to make sure. Here’s my question:

 

Is there any way the CC companies can claim that since I’m paying a full-interest balance off and then transferring a new balance at 0% before the statement date, they can still count some of my debt as being at full interest?

 

E.g. I’m worried about MBNA saying something like ‘because you paid off that £1.4k but then put a new balance on the card before the statement date, £1.4k of your new balance will now be considered to be at full interest rather than 0%, and you’ll have to pay off all of the debt at 0% before you’re allowed to start paying down that £1.4k of full-interest debt.’

 

I really can’t see what mechanism they could use to do this, but I’ve been burned many a time before, so I just thought I’d ask here and see if anyone can put my mind at ease.

 

PRAISETHESUN

Any reason you need to do a 3 card shuffle like this? Couldn't you just BT your Barclaycard balance directly to MBNA? Can't say much without seeing the full terms of all your cards, but as long as fully clear the cards before you BT new funds then you shouldn't have any issues with different promo rates/expiry dates on different parts of your balance, or with the companies trying to charge you interest on what is clearly a 0% BT offer. Make sure you keep to the minimum repayments!

ChrisLV

Thanks Praisethesun. I can't do Barclaycard direct to MBNA because my Virgin balance is currently at full interest, so I have to do the three-card shuffle to get it all at 0%. Sure will feel good to have it all at zero!

onlyfoolsandparking

Providing you have big enough credit LIMITS to do the 3 B/T,s then it's a good plan, as an aside it's always prudent to have at least a couple of 'empty' cards to avoid the situation you now find yourself in so if you only have these 3 cards you are mentioning might be beneficial to 'try' and get a couple more. Of course that may not be easy in current climate but certainly worth considering. 

Good luck with the transfers though and hopefully you have got the limits to do it as the benefit will be huge in comparison paying big interest or 0% interest, do come back and let us know how you got on, will definitely be helpful to others in your situation. 

FinanceFerret

Have you looked at a personal loan? That could be cheaper.  
I don't get why you are waiting until the due date to pay off the MBNA, that's just going to build more interest in the meantime. You don't mention the rates, but could easily be over £9/day, nearly £300/month just adding itself onto your debt.  Do that sooner if you can. Otherwise, assuming credit limits allow it, the plan should be possible.

born_again

Just remember you will have a bit of trailing interest on all 3 cards as well. 

Any way you could get it down to 2 cards?

ChrisLV

Thanks all for the replies.
Re: limits--yes, I have the limits to do this now. I think Barclaycard may reduce my limit substantially once I take the balance off it, but that's fine.

@born_again -- You mean get my debt onto just two cards or actually cancel one card? The plan above should get all my debt onto just two cards. Re cancelling, I no longer have any real use for the Barclaycard (haven't used debt products for almost two years, except a points card that I pay in full each month), so I could cancel it, but it's one of my longest-standing financial relationships, so I want to keep it open to maintain a higher credit score, at least until I upgrade from my current M&S points card to the lovely BA Amex. 

Re a loan, I've got one at present at 13% APR, which is where I'll focus most of my debt-reduction efforts once my cards are on 0%. The usual balance transfer offers I get on MBNA and Virgin cards are for a 5% fee for 12 months, so an effective interest rate of 5% annually. My thinking was that's better than I'd get with any loan.

ChrisLV

@FinanceFerret --I'm not waiting for the due date to pay off my MBNA. I'm waiting for my pay cheque.  

born_again

ChrisLV said:

Thanks all for the replies.

@born_again -- You mean get my debt onto just two cards or actually cancel one card? The plan above should get all my debt onto just two cards. Re cancelling, I no longer have any real use for the Barclaycard (haven't used debt products for almost two years, except a points card that I pay in full each month), so I could cancel it, but it's one of my longest-standing financial relationships, so I want to keep it open to maintain a higher credit score, at least until I upgrade from my current M&S points card to the lovely BA Amex. 

Not to cancel the other card unless you want to. Just doing it that way, makes only 2 payments & a option that the  other card could still offer good deals, while the others may not.

ChrisLV

Just reporting back that I did the credit-card shuffle as outlined and now all my CC debt is on 0%. Feels nice!
As an added bonus, I also learned (from doing the MSE money makeover) that once I've built our emergency fund back up again, I can probably shift the 13% APR Zopa debt to a much lower APR loan and pay it off comfortably in a year.