MBNA Balance Transfer and Tesco cashback question.

Belenus

We do a lot of stoozing and avoid paying any interest by paying off the balance transfer in full before the end of the promotion period and by avoiding mixing purchases and balance transfers on the same card.

I have an MBNA card that I used solely for a balance transfer and paid off in full about 2 years ago and haven't used since.

MBNA are offering me a 24 month 0% interest balance transfer for transfers done by the end of April.

MBNA have also offered me 15% cashback with Tesco for a single purchase by 15th April up to a maximum of £30 cashback. That means I could spend £200 in Tesco and get £30 cashback. We shop frequently in Tesco so we would only be buying things we would buy anyway.

One of the terms of the balance transfer is this:

'To avoid paying interest on purchases you need to pay off your monthly statement balance in full and on time every month, including the value of any transfers, unless a 0% p.a. rate for purchases applies.'

If I understand that correctly, if I spend £200 in Tesco today and then do a balance transfer for £8,000 late in April, I will presumably have to pay off the £8,000 in full the following month and lose 23 months interest free rendering the balance transfer pointless.

Can I avoid that by spending £200 in Tesco today, and then paying MBNA £200 a few days later, thus clearing the balance to zero or will the fact that no statement will yet have been generated trip me up.

The balance transfer deal is worth far more than £30 at Tesco so I will forget about Tesco unless I can find a comparable balance transfer deal elsewhere.

Thanks

Brie

This is the sort of situation where I phone customer service to ask if what you are proposing would work. Personally I think it would because paying the £200 would mean you are clearing the balance that will accrue the highest interest charge and according to industry guidelines that has to happen. If you ring them and they agree with you make sure you have the name of the person you are talking to as well as the date, time and number you ring just in case you do run into problems then you will know who to "blame" for giving you the wrong info..

The other thing that might help is changing the statement dates so that the £200 is on a different statement to the BT. Might make things a tad tidier.

molerat

You are over complicating things. Interest would only be applied to the purchases so at around 25% would be £4 ish for a full month worst case. There would be no need to pay off the full balance. Easiest thing would be spend the £200 and pay the card off as soon as the purchase clears then do the BT. You also may be able to work it round statement dates