# MBNA Credit Cards Balance transfer



## machalla (2 Sep 2003)

I am considering switching my credit card to MBNA from Bank of Ireland to take advantage of the six month balance transfer rate of 1.9%.  I currently pay off my credit card 100% every month but due to unexpected costs recently which I had to put on my credit card, I now have an overdraft that is equivalent to a  significant part of my monthly wage. This is because the credit card is paid off automatically 100%. 

I intend to pay off the credit card balance over the period which I can do easily rather than having to pay a large lump all at once which would put me over my agreed overdraft limit.   Without the sum on the credit card to pay off all at once I will elimate my overdraft next month and can pay the remainder off over the period.

Is this a good approach to clearing out a short term debt?  Are there hidden costs involved in the MBNA cards?  Any suggestions to dealing with this would be most welcome. 

Thanks.


----------



## Savy (2 Sep 2003)

machalla,
This is a sensible solution to your problem.
I would not limit to MBNA they do a lot of advertising and I think are the most visible c/c lender.
Check the  Best Buys

Ultimately you will reduce your interest repayments on the c/c and avoid overdraft penalties.

Just make sure to get rid of the c/c with the highest interest rate after the promotional rate is gone.
If this is BOI, then bin it now.
S


----------



## daltonr (2 Sep 2003)

Switching will cost you €40 straightaway in Stamp Duty, which may or may not be significant depending on your balance.

Mention to your current card company that you're planning on leaving them and see what happens.  Explain the situation.  You never know.

-Rd


----------



## machalla (2 Sep 2003)

Thanks for the suggestions.  I hadn't thought of AIB as an option but I see that according to best buys they do a balance transfer of 0% for the first 6 months.  Which would suit me just fine.  

I might just contact Bank of Ireland and see what they have to say about switching card companies. Although I'm not sure they would be that sorry to see me go as they've never made a penny out of my credit card due to it being paid off automatically.

The €40 card fee is a little bit of a dampener but based on approx €2,000 on the credit card it would probably be recouped quicker than paying the interest on this amount for a couple of months.  I'm not exactly sure of the calculations on interest like this over a period of say 3 months but but I imagine its greater than €40.


----------



## valeriana (3 Sep 2003)

*BoI*



> If this is BOI then bin it now.



Why BoI in particular?


----------



## TopMan (15 Oct 2003)

*Other Credit Cards*

In the UK the market for Credit Card operator is very competitive. 

Here we seem to only really have MBNA and the Banks.... are there any others ?

Thanks


----------



## BG (15 Oct 2003)

*Re: Other Credit Cards*

If one gets into difficulty with credit card debt then, IMHO, MBNA are horendous to deal with.  

BG


----------



## monk (15 Oct 2003)

*Re: Other Credit Cards*

Agreed BG, if you are anyway delayed in paying the monthly minimum, no matter what balance is on the card, they're straight onto you with letters/phone calls etc. I was just being lazy not paying that month because there was a balance of less than E20. It definately cost them more in sending out letters etc than it cost me to leave it OD for the month.

In saying that MBNA were very good when a fraudalent transaction was taken from my card. I didn't know about it until I got my statement, got on the phone to them, through to the security dept., they took the details over the phone said I would not be held liable and sent out a new card within the week!! No fuss, very efficient/professional.


----------



## gerry (16 Oct 2003)

*Debt*

Machalla,
Another option is take off the full payment option  - just contact credit card provider.

Assuming that you are in employment and have a salary coming in  - do the following:

When you get paid, either weekly or monthly pay off the credit card in full and then only use the credit card for all purchases. Keep doing this every month until you pay off - based on the assumption that you are not spending more than you earn.

This works particularly well if you have a second card - the minute you get one statement, only use that card and you wont have to pay it off until approx another 56 days. if you have an overdraft on a current account, you can do the same thing, ie use overdraft to pay off credit card bill and use salary then to pay off overdraft.

If you do decide to get MBNA card dont get rid of Bank of Ireland card until before new credit card tax is due - use MBNA credit card cheques to pay off other overdraft or other credit card.

I use this principle very effectively at the moment, using overdraft, salary and 2 credit cards - usually end up paying interest for maximum of 10 days.


----------



## gerry (16 Oct 2003)

*Pay them though*

BTW if you dont pay minimum fee they hammer you for late fee. DO NOT take out premium protection policy - waste of money unless you knew you were about to lose your job and if you knew that the cover would not be paid !


----------



## Wings Of Chicken 1 (17 Oct 2003)

*Re: MBNA premium protection policy*

*gerry*,

Surely the insurance would not pay out if you _"knew you were about to lose your job"_.

Wings


----------



## tedd (18 Oct 2003)

*Re: MBNA premium protection policy*

I think you would need to be very disciplined to avoid gettin ginto serious debt with the strategy described. Paying 10 days interest every month is still fairly expensive. 

An alternative strategy is pay as much as you can into your cc each month to pay off the debt but to use cash for absolutely everything else (ie no new cc bills at all). I think it's much harder to spend cash that you don't have than to spend using credit that you have, but can't afford...


----------



## machalla (22 Oct 2003)

*How not to do it..*

Well,

Its all turned into a bit of a mess but what can you do.

Applied for an AIB credit card.  It got a bit delayed getting out to me it seems so by the time I got it I wouldn't be able to transfer the balance before the 100% direct debit kicks in.  

Rang up BOI and was told that it would take at least 5 days to change the direct debit to 20% by which point in the time the full amount would come out of my current account.  Was also told that they could refund the money from card back to my current account and then could pay off 20% of balance on card.  Waited for it to happer after instructing them to do so. Finally was told today that no actually they couldn't do this so there you are.

Current account is now royally overdrawn (over the agreed overdraft limit by about €1500) till next week.  Cashed in a few shares and was selling a spare pc sitting at home so I should be able to just about balance out my current account to €0 or less by next week when wages and share cash come through.  Was hoping to avoid this as it means I will drag myself back into overdraught territory for another couple of months after this.  Will transfer small balance off BOI credit card to AIB one and take advantage of the 6 months "free" credit.  

What I want to know is how much is the overdraught going to cost me? Nobody in BOI could tell me (either in the loans section or the customer service section who both referred me to each other for the answer to this).

The interest on an overdraught is calculate on a daily basis now it seems according the people I talked to.

Anyway perhaps the above info will help someone who wants to do something similar but do it the right way!


----------



## tedd (22 Oct 2003)

*Re: How not to do it..*

As far as I am aware, it is usually cheaper to have a term loan than an overdraft. It is ridiculous that B of I staff say they don't know how much they charge for overdrafts. Go into the branch and refuse to leave until someone gives you the answer to this. They will certainly remember the rate when it comes to charging you the interest!


----------



## veron01 (22 Oct 2003)

*Re: How not to do it..*

I was given this formula by AIB 

2.50 charge each month&nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp 
Rate for overdraft&nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp 
&nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp 
Overdraft x time (1 or 2 days etc) x AIB rate (10.7%) / 36500 &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp 
&nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp 
Example overdrawn €100 for 1 night&nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp 
€100 x 1 (day) x 10.7% / 36500 = 0.029 cent&nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp 
Hope this helps.


----------



## gerry (26 Oct 2003)

*strategy*

Missed this thread for a while. Don't agree tedd, if you dont have the money to pay off credit card you will HAVE to pay interest. Therefore an overdraft rate is much better than a credit card one. Veron1's formula shows that the interest will not be huge. Since I posted previous thread, MBNA have written to me to offer an interest rate of 1.9% and 3.9% respectively (two separate cards). I will use my strategy to minimise the money I owe by writing MBNA cheques and lodging into current account. Therefore no overdraft anymore and then paying 1.9% on loan. Use credit card for all purchases on other card. When bill is due, do above again and also pay salary into whatever account is owed money. After I pay my debts off I will use up all my credit on both cards by writing cheques and investing money into Anglo Irish or Northern Rock until the low rate expires. Make a little money also !


----------



## Breeze (30 Oct 2003)

*Re: strategy*

What do people think of payment protection on MBNA cards. Is it a scam or worthwhile?


----------



## alannah (31 Oct 2003)

*Premium Protection Insurance*

Breeze - Forget about it. That single product is the biggest money spinner. If you ever ring MBNA, their customer service is excellent but they really try the hard sell with the insurance. There is so much small print that it is not worth it. (I am only waiting for someone to reply that it is beneficial if you lose job etc etc.) If you do want this type of insurance talk to an insurance broker who will be able to offer better cover at a lower price.

Using their cheques when you get special rates are great though. If you are in overdraft, you can pay off debt at rate of 3.9% (I believe some affinity cards can be 1.9%) for say 6 months. Great for short term debt and you improve your credit rating because the O/Ds are cleared and then the clock restarts.....................


----------



## Breeze (31 Oct 2003)

*cc insurance*

thanks for that. Unfortunately I already have insurance but have run up over 5 grand on the cc. The interest is bad enough but the insurance is over half that. The cs are very persuasive in making feel like you are an complete idiot for even thinking of removing the insurance. If I only pay the minimum for next year I'll be paying about €500 to them for some type of peace of mind?. The way I'm thinking now is that if I lose my job or get knock down, get sars, i'll be screwed anyway so in for a penny in for a pound. So do I cancel it or do I not? more opinions welcome.

So are you saying get big overdraft, pay off cc. Then switch from o/d to cc by paying cheques to myself? While doing this pay off cc at very low rate?


----------



## ecstatic (5 Jan 2004)

*Cancel Alright*

Cancel i had hell trying to get em pay up after losing a job..


----------



## Breeze (6 Jan 2004)

*Re: Cancel Alright*

I cancelled, min payments down €40. Feel much better. thx


----------

