MBNA/Abbey 2 Balance Transfers - Quick question

CheeseCat

Hello all,

Hoping one of you can help me with some advice on my MBNA/Abbey card.

I have just got a letter from Natwest to inform me my account is changing and my overdraft will go down to £100 - I have -£1000 in there at the moment at the end of every month so I was wondering if I could do a £900 balance transfer onto my Abbey card. I have the credit free on the card but heres where I am confused...

I Already have a £750 balance transfer on there which is 0% until December. (Which I have aimed to pay off by November on my incoming/outgoing spreadsheet I keep)

If I put £900 more on another balance transfer which Abbey are offering as 0% until April 2009 which one will the money come off first?

I know that with the £750 balance trasnfer at 0% on there at the moment, if I make any other spends they essentially go "under" the transfer and any payments I make come off the £750 which is no-interest rather than off the payment which would be mounting interest. Is the same with balance transfers?

I hope this makes sense.
For example

£750 0% until December
£900 0% until April

If I pay £750 in before November does that pay off the 0% until Dec or does it come off the 0% until April and essentially I still have the £750 one on there which will start charging me interest after December?

YorkshireBoy

The current MBNA T&C's state that in your situation, any payments you make will go to your 'until December' balance transfer...https://wwwa.applyonlinenow.com/UKCCapp/Ctl/link?eid=FFFD1D8B (see condition 2f). I believe this is a recent change to the T&C's, so you need to refer to your own account T&C's and/or any notice of variation received.

DestroyingAngel_2

CheeseCat wrote: »

I Already have a £750 balance transfer on there which is 0% until December. (Which I have aimed to pay off by November on my incoming/outgoing spreadsheet I keep)

If I put £900 more on another balance transfer which Abbey are offering as 0% until April 2009 which one will the money come off first?

I know that with the £750 balance trasnfer at 0% on there at the moment, if I make any other spends they essentially go "under" the transfer and any payments I make come off the £750 which is no-interest rather than off the payment which would be mounting interest. Is the same with balance transfers?

I hope this makes sense.
For example

£750 0% until December
£900 0% until April

If I pay £750 in before November does that pay off the 0% until Dec or does it come off the 0% until April and essentially I still have the £750 one on there which will start charging me interest after December?

Ahhh, payment allocation, a personal favourite of mine First things first - Balance Transfers (BTs) and Money Transfers (MTs) are essentially the same, only with BTs the money goes towards paying off other cards, and with MTs the money goes into your current account. The handling charge and the promotion rate would be the same.

Here's a couple of ways you can play it. If you whack the new BT on at "0% until April 2009", then whatever you pay off will go towards paying the balance under the promotion that ends first, viz the "0% until December 2008".

Or, you could ask when you're doing the BT/MT at "0% until April 2009", for the balance at "0% until December 2008" to be put onto the same promotion as your new BT/MT. Effectively, this would roll both amounts into one and you'd benefit from a 4-month extension of the 1st BT i.e til April 2009.

Whatever you do, make sure if you have a BT on a c/card, keep that card for BTs and only BTs. If you make retail purchases using the same card, then, because of Payment Allocation (i.e your payments will be used to pay off the balance at the lower interest rate first before the balance at the higher rate), because retail would have a higher APR (unless, of course you had a 0% promotion on that as well), you'd be paying off the BT first before your retail balance is even touched.

Hope this helps!

CheeseCat

Thankyou SO much for your advice.

I have already planned to pay off the 0% until December balance by November and can also put some money towards the 0% until April one by then too, so if it works out "the good way round" I wont have to pay any interest.

I was thinking of doing it anyway as even if I get it all until December and pay most of it, its probably better than paying interest on an "unauthorised overdraft" from Natwest while I sort this out.

Thanks again both of you

Oh and the Abbey card is already in the back of my wallet with a big "DO NOT USE" sticky on it so I don't use it by accident and out of habit!

I have recently gotten a Capital One card to use the way I was using my Abbey card (ie: using it and paying off in full each month)

NickX

DestroyingAngel wrote: »

First things first - Balance Transfers (BTs) and Money Transfers (MTs) are essentially the same, only with BTs the money goes towards paying off other cards, and with MTs the money goes into your current account. The handling charge and the promotion rate would be the same.

Sorry to disagree but this is not always the case.

Only a few rather special cards treat transfers to your Bank Account at Balance Transfers rates. These include Egg, Egg Money, Post Office Card, and any card adminstered by MBNA (including the Virgin range of cards).

In addition MINT periodically issue Credit Card cheques that can be paid into a Bank Account at Balance Transfer rates.

However, many other card providers will treat Money Transfers as Cash Withdrawals and charge extortionate interest rates from the date of the transaction, not to be advised unless you have money to burn.

YorkshireBoy

DestroyingAngel wrote: »

If you whack the new BT on at '0% until April 2009', then whatever you pay off will go towards paying the balance under the promotion that ends first, viz the '0% until December 2008'

With respect, that's a generalisation...and a potentially very dangerous and expensive one. It may be true for new MBNA cards (and possibly some of the other cards they run), but the Abbey cards will be 'old stock' now that Santander has been/is trying to poach customers from MBNA. Indeed, I can't find the current MBNA run Abbey T&C's on the internet. That's why I suggested earlier that the OP checks their own T&C's...not what they currently are for new customers.