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1.9% Balance MBNA balance transfer promo rate - worth it?

Hi Folks,

I've already been there with the MBNA 0% introductory rate, maxxing out to the credit limit, transferring it to an ING direct high interest account an pocketing the interest.

Anyway the MBNA call centre in India rung this week offering a 1.9% balance transfer rate on one of my other MBNA cards until mid next year. On a separate note I must remind myself never to answer calls flagged as INTERNATIONAL :)

After I turned him down repeatedly, the agent mentioned I could transfer up to 95% of my credit limit directly into my bank account if I wished. I told him I'd think about it...

Assuming a balance transfer fee (say 35 quid) is involved will it still be worth it to accept the deal and place the do$h (around 8000) into a 5% ING Direct account and leave it there until the end of the promotion? I've run out of 0% introductory offers now so this may be my only avenue :)

The financial institutions are virtually twisting your arm these days to accept their do$h. I guess they are hoping people overstretch themselves over the Christmas period, resulting in large interest payments later.

Brgds,

Reply to
Trust No One
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Let me see if I understand this. You've borrowed £8k at 0% in order to invest it at 5%. That gives you a profit of £320 per year until the 0% deal runs out.

Now you're thinking of transferring the 0% debt to a 1.9% account. Obviously you wouldn't do this before the 0% offer ends (unless there's a deadline for going for the 1.9% rate). Or perhaps you just want to let the 0% deal run its course independently and borrow an additional £8k at 1.9% to invest at 5%?

Either way it depends on how long the 1.9% borrowing will actually last. If it's 6 months, £8k at 1.9% will cost you £76 in interest (more if compounded) plus the £35 fee. That's £111. At ING you will earn £200 gross, £160 net (so you still make almost £50). But if you're into higher rate tax, the £160 becomes £120. Is it worth the hassle just for £9? Probably not. Is it worth the hassle for £49? You tell me.

Reply to
Ronald Raygun

Thanks for this. The 0% promotion period ended quite a while back on the card, so I was wondering whether the 1.9% option was worth going for given that there is probably no chance of being offered another 0% deal on the same card.

Thanks for pointing out the tax bracket angle, which I had not thought about.

I'll see whether I can get the balance transfer fee waived and also whether I can get the period upped to 9 months on the 1.9%. Nothing ventured nothing gained :)

Reply to
Trust No One

Why don't you just apply for a new card with a different provider? There are plenty out there offering interest free periods on new accounts.

Reply to
Helen

I think he said he already had just about all the 0% cards already. Having said that, I am in a similar situation with a drawer full of o% cards with exired 0% periods which are no longer being used, so I decided to ring round cancelling them all, and was surprised at the number who said "would you be interested in transferring any balances to us at 0% for 6 months".

Reply to
Adrian Boliston

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Tried this one yet ?

Joe

Reply to
Joe Hunt

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