Interest free short term loan - through MBNA credit card

Macstuff

Registered User
Messages
229
I was looking around for a term loan and found a great offer from MBNA (with whom I have no connection).
They offer a credit card with 0% interest for ten months on balance transfers from other credit cards... OR if you don't have a CC balance to transfer, you can transfer any amt. up to your allocated credit limit to a bank account interest free for ten months.

I was given a credit limit of 7,000 euro and will use that to pay off two loans that I have. In the meantime save the monthly loan repayments in a savings account for ten months and will then use that to pay back the 7k... thus saving me approx. 600 in interest payments.

The limit allocated to me was probably higher than normal - as I have a good credit history and have been an MBNA customer a few times previously. However, it's worth trying for anyone who needs cheap money for a short period.... assuming you can pay it back on time.
 

bluemac

Registered User
Messages
286
In most cases there is a one of fee for doing this €50 or 3.5% which ever is the most
so you transfer 7000 and it costs you €245 if you miss just one minimum payment the interest is added on and if you use the card to buy anything you have to pay off the first 7k before you can pay of the items you bought which will be charged at the standard 18% interest.

if you stick to the rules it costs you 3.5% which is good but make sure you can pay it off at the end or one months interest at 18% will make it a waste of time.
 

Macstuff

Registered User
Messages
229
Thanks for the input guys. I went ahead with my application for the card yesterday ie I signed the contract documentation required by them. I also phoned them to clarify what the charge would be for doing a transfer to my current account once everything was set up and was told there would be no charge.
I will let you know what happens when I come to actually doing the transfer.
If it works it's a great deal for my circumstances .....
 

flossie

Registered User
Messages
406
Hi Macstuff,

If used correctly, i think the 0% balance transfer / low rate balance transfer can be beneficial. I used them to clear student loans etc. However, the card I am using with the balance transfer on is never in my wallet and av ailable to spend, it is solely for that purpose. Even suggest cutting up the card, pretend it's not there.

Set up a standing order for whatever you can afford. I think for MBNA it is a minimum payment of €25 or something, I was paying about €900 off to clear things out of the way. If you miss a payment you automatically revert to standard interest rate.

Good luck,.

Floss.
 

Macstuff

Registered User
Messages
229
Thanks Flossie,

I agree - I have used MBNA cards previously, in the way you advocate, and will be doing the same thing again.
It's a great system as long as you play by the rules.
 

Macstuff

Registered User
Messages
229
Just a quick update on this. I got my credit card last week and did a balance transfer to my current account today - I am now back in credit for the first time in ages!!!
There was no fee for doing the balance transfer - I was able to do it online. The only restriction was that you can only transfer up to 95% of the available credit limit. I have set up a direct debit to make sure that I don't miss any payments and so lose any of the benefits - I sent off that form today.
I won't be usign the card for any spending and will close the account at the end of the ten month interest free period.
I might even apply again for this at some stage in 2013 as I will still have some loans to clear then (long story).
 
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