MBNA Existing customer Promotional offer advice

edc100

I have an MBNA Credit card which had a promotional balance transfer rate of 0% when I signed up last year. Unfortunately I could not pay off as much as I wanted due to losing my job last November so I have £400 outstanding which is being charged interest. They have recently offered me a 0% balance transfer until January 2009!

I am considering transferring an existing loan onto this card for the 0% interest as I am confident I can pay the whole lot off by January 2009 due to my new job and better security.

My question is...

If I transfer, for example, £2000 + 3% handling fee to my MBNA card my new balance will be approximately £2500. Now if next month I pay £200 off my balance what does that £200 go towards? Is it tiered so I pay my £400 off first or is done by percentages? Basically I am happy to pay interest on the £400 for 2 months whilst I pay it off.

Any help, advice much appreciated. I have also applied for other cards but I think my credit rating is not too great at the moment due to short term employment despite not missing a single bill payment in the last 5 years.

bethanyrayne

edc100 wrote: »

I have an MBNA Credit card which had a promotional balance transfer rate of 0% when I signed up last year. Unfortunately I could not pay off as much as I wanted due to losing my job last November so I have £400 outstanding which is being charged interest. They have recently offered me a 0% balance transfer until January 2009!

I am considering transferring an existing loan onto this card for the 0% interest as I am confident I can pay the whole lot off by January 2009 due to my new job and better security.

My question is...

If I transfer, for example, £2000 + 3% handling fee to my MBNA card my new balance will be approximately £2500. Now if next month I pay £200 off my balance what does that £200 go towards? Is it tiered so I pay my £400 off first or is done by percentages? Basically I am happy to pay interest on the £400 for 2 months whilst I pay it off.

Any help, advice much appreciated. I have also applied for other cards but I think my credit rating is not too great at the moment due to short term employment despite not missing a single bill payment in the last 5 years.

Your payment would go to the transfer fee and promotional balance first. Your existing balance of £400 will be locked in and you will be paying interest on it until O% balance is cleared.

Is there someway you can clear outstanding balance before doing transfer?

edc100

Thanks Bethanyrayne, I thought it might be like that.

I think what i will do is pay off the £400 this month from my wages and add £200 to the cheque I was going to write into my current account to pay off the loan.

bethanyrayne

edc100 wrote: »

Thanks Bethanyrayne, I thought it might be like that.

I think what i will do is pay off the £400 this month from my wages and add £200 to the cheque I was going to write into my current account to pay off the loan.

Please wait until you get a statement online/paper showing a zero balance before doing transfer.

edc100

Excellent advice, I did not think about that!

Many thanks again

CannyJock

edc100 wrote: »

If I transfer, for example, £2000 + 3% handling fee to my MBNA card my new balance will be approximately £2500. Now if next month I pay £200 off my balance what does that £200 go towards? Is it tiered so I pay my £400 off first or is done by percentages? Basically I am

Allocation of payments will mean that all payments will go against your interest and the 0% balance before it touches your £ 400. So you'll be charged interest on that for a lot longer than 2 months. You didn't think they were actually offering to do you any favours did you?

What you could do, is start by transferring £ 400 balance from another card (yours, relatives etc) to your Virgin card, moving the £ 400 balance onto other card where it becomes £ 412, assuming 3% BT fee. I would also make a payment to the Virgin card anyway to deal with any residual interest and actually leave them owing you a few quid. You'll then get a statement where any interest is deducted and confirming you don't owe them anything.

Then you would phone Virgin and ask them to do the balance transfers to clear your £ 412 and to clear your loan, and you'd have the full debt at 0% (or 2.98% if that's still their BT fee). When you call to take them up on the offer, haggle for them to waive the fee and to increase the length of the offer to 15 months from the date of the call.