MBNA 1.99% Balance Transfers

[Super_Geo]

I was hammered and signed up for one of those MBNA credit card at the dome and didn't remember until it arrived in the mail... this was a couple of years ago.

I had a $12k limit on it and never used it, then lost it and called in for a new one. When I was activating it the guy on the phone asked if I wanted to do a balance transfer for 1.99%, good for one year. I asked how much I could transfer and he said "well, for as much as your credit limit." It was good for one year (May 2010). I transferred as much as they'd let me, set up my internet banking to do an automatic $100 payment per month and then threw the rest at higher interest debt. It was a pretty good setup, saved me ~$450 (my LOC was at 6.5%)... I paid off the balance right as the interest went from 1.99% to 20.99% and that was that.

I cut up the card a year ago (was maxed out anyway), so I thought I might as well get a new one just in case I need it and as I'm activating it they offered the 1.99% deal again, and again good for 1 year. :D

I'm thinking about increasing my credit limit. I haven't increased the credit limit in any of my cards in over a year, so I figure I should be able to get it up to at least $20k and then max out this balance transfer.

The only problem is that it would put my credit utilization over 50%, and it would stay over 50% for a whole year. Would that have any long term effects on my credit score? I know your credit score is lowered by high credit utilization on balances that you carry forward, but once you pay it off does it return to its previous value right away?

If it doesn't really hurt your credit score, this is a pretty good deal from MBNA... In total I will have saved over $1,000 in two years from interest payments from my LOC and mortgage, and just from a 10 minute phone call and setting up an auto-payment system online. :burnout:

One thing that caught my ear though... if you miss one payment the "promotional offer" of 1.99% is over and you're paying 21% on your full balance. I'm sure that's how they make their money. I can't imagine how fucked some people must have gotten from that!

edit
Oh, and another thing... there's a 1% 'processing fee.' I told the guy on the phone "well that's really 2.99% then, not 1.99%" and he immediately said "Well if you're willing to act now, I can waive the 1% processing fee." Nice!

[FiveFreshFish]

RBC Visa routinely send out Visa cheques with a low interest rate but there's no processing fee. The current batch is good for 1.99% until Oct 31st.

[broken_legs]

2 things I knwo of but cannot quantify for you because its a credit industry secret.

1.) If you apply for more credit (ie Do a credit App to increase your limit) your score will go down - Not so if you are preapproved - Always ask to see what you can get without them running a credit check. I do it every 6 months.
2.) If your balance on any one account is over 50% thats bad, also bad if the total is over a certain amount.

Hope that helps

;)

[TDA]

look on redflagdeals.

There has been a 0% MBNA balance transfer for years. 1% balance transfer fee, but still better than 1.99 + 1

[canadiandaytona]

Originally posted by TDA
look on redflagdeals.

There has been a 0% MBNA balance transfer for years. 1% balance transfer fee, but still better than 1.99 + 1

got a link haven't been able to find a deal like that at all.

[TDA]

http://forums.redflagdeals.com/mbna-0-15-months-thread-2-a-813854/

Read the first post completely. don't be the next guy that asks something that was answered in the constantly updated first post.

[TDA]

Must caution people thinking about this that this requires financial discipline. Only use the card for BT and cut it up. Because any payments applied to the card goes to paying off the lowest interest rate first, if you actually use the card for other things than the BT, you screw yourself.

[tentacles]

One thing that caught my ear though... if you miss one payment the "promotional offer" of 1.99% is over and you're paying 21% on your full balance. I'm sure that's how they make their money. I can't imagine how fucked some people must have gotten from that!



Must caution people thinking about this that this requires financial discipline. Only use the card for BT and cut it up. Because any payments applied to the card goes to paying off the lowest interest rate first, if you actually use the card for other things than the BT, you screw yourself.

Honestly this isn't a big deal. I have $15k on this and I forget to pay it all the time. Every time I just call them and tell them I didn't get the bill or something and they just waive it. Last couple of times I didn't even bother coming up with an excuse and never had a problem.

[PeterGTiR]

I had these balance transfer cheques from MBNA with a 0.99% Promotional Annual Interest Rate and at the very bottom it says that the transaction fee for this transaction is waived.

[TDA]

Originally posted by tentacles





Honestly this isn't a big deal. I have $15k on this and I forget to pay it all the time. Every time I just call them and tell them I didn't get the bill or something and they just waive it. Last couple of times I didn't even bother coming up with an excuse and never had a problem.


What I meant is not using the card for groceries, gas, etc. Rather than being late on payments.

Let's say you have a 10k BT, and spend 200$ on random stuff.

You now have 10k at 0% and 200$ at 21%

You make the next payment of $200+ whatever minimum is. That 200$ goes to pay off the 0% so you now have a 9.8K BT at 0% and a 200$ at 21% interest.

that 200$ stays on you at 21% until you pay off the rest of the 9.8k at 0%.

[Super_Geo]

Does anyone know how quickly your credit score recovers from having a high credit utilization? I remember the breakdown was like:

40% Credit History
30% Credit Utilization
20% etc....
10% etc...

So if you have high credit utilization, that 30% section gets fucked... but after pay it all off, how quickly does it recover?

And damn it, I already agreed to the 1.99% (no 1% BT fee though)... left $120 on the table. Calling them back, on hold now to see if I can still get the 0/15.

[TDA]

It does hurt your credit score. But looking from your post, you already got your LOC, and your mortgage. Not sure about a car loan. Do you anticipate needing credit in the near future? That's the better question.

Me? I already got my mortgage. So In the short term I don't care too much about my credit score.

[Super_Geo]

Called them back and the girl on the phone was more than happy to cancel the old one at 1.99% and re-apply at 0.99% with no balance transfer fee.

I'm guessing they're paid commission on how they can get people to balance transfer so there was no reason for her not to do it (other than fucking over her co-worker).

How is MBNA making money on issuing 1% credit??!


Originally posted by TDA
It does hurt your credit score. But looking from your post, you already got your LOC, and your mortgage. Not sure about a car loan. Do you anticipate needing credit in the near future? That's the better question.

Me? I already got my mortgage. So In the short term I don't care too much about my credit score.

I don't have a car loan, I just used my LOC.

I don't need more credit in the short term, but I want a strong credit score for when my mortgage expires and I need to reapply...

In fact, I currently have more available credit than I can hope to service (unless it's sub-prime), so yeah... definitely no intentions of getting more in the short term.

[TDA]

Originally posted by Super_Geo
Called them back and the girl on the phone was more than happy to cancel the old one at 1.99% and re-apply at 0.99% with no balance transfer fee.

I'm guessing they're paid commission on how they can get people to balance transfer so there was no reason for her not to do it (other than fucking over her co-worker).

How is MBNA making money on issuing 1% credit??!



Happy to save you $120 with 5 minutes of typing.

There's plenty of people who don't bother to read the rules and terms/conditions get into the trap I mentioned above. And by that time they realize it they've blown the balance transfer on Booze, cars, chicks and whatever else. BAM, trapped.

[tentacles]

Originally posted by TDA



What I meant is not using the card for groceries, gas, etc. Rather than being late on payments.

Let's say you have a 10k BT, and spend 200$ on random stuff.

You now have 10k at 0% and 200$ at 21%

You make the next payment of $200+ whatever minimum is. That 200$ goes to pay off the 0% so you now have a 9.8K BT at 0% and a 200$ at 21% interest.

that 200$ stays on you at 21% until you pay off the rest of the 9.8k at 0%.

I know, I'm fairly sure I did this at least once too, it was because the card had some kind of BS "balance insurance" thing that I forgot to cancel. It wasn't a problem, I just called and got them to get rid of it.

The banks want you as a customer, just ask and anything is possible.


How is MBNA making money on issuing 1% credit??!


US Banks get money for free from the US government. MBNA = Canadian division of Bank of America.

[Mckenzie]

I've been using the MBNA balance transfers for years now and love them for financial re-engineering of different credit balances on my profile.

1- Just use this as a balance transfer card and THATS IT! If you do a 15k balance transfer and then still use it for your daily credit card, you need to pay off the lower interest rate first before paying off the plasma.

2- You will get calls all the time about balance insurance. Just decline.

Other than that, I don't see anything wrong with them.

[rage2]

Originally posted by TDA
Because any payments applied to the card goes to paying off the lowest interest rate first, if you actually use the card for other things than the BT, you screw yourself.
I've been a MBNA cardholder since '95 or so, and just got a letter in the mail stating changes in how the payment is applied. All payments now goes towards the HIGHEST interest rate first. Kinda nice for those that take advantage of their promo rates.

[kaput]

.

[rage2]

If you have no debt, then Balance Transfers are useless. It's a low interest loan to clear off other loans/credit cards.

[kaput]

.

[rage2]

If you look at it that way, yea haha.

[djayz]

You can also do cash advances and get a short term loan at whatever rate they are offering.

I've been rolling through MBNA and Citibank offers for a while now all offering between 1-2.99%. Just write a cheque to yourself from the CC and you have a cheap loan or you can apply to a higher interest loan rather than another CC.

[broken_legs]

Originally posted by djayz
You can also do cash advances and get a short term loan at whatever rate they are offering.

I've been rolling through MBNA and Citibank offers for a while now all offering between 1-2.99%. Just write a cheque to yourself from the CC and you have a cheap loan or you can apply to a higher interest loan rather than another CC.

You're actually doing this?

I thought somewhere in the terms it said balance transfers were only good on actual balances and not cash advances? maybe im just dreaming this up.. That sounds like a good trick if it works.

[djayz]

Originally posted by broken_legs


You're actually doing this?

I thought somewhere in the terms it said balance transfers were only good on actual balances and not cash advances? maybe im just dreaming this up.. That sounds like a good trick if it works.

Yup been doing it for several years, only thing that I have had a problem with is getting the 1% transfer fee waived, but still a 1.99%+1% loan for 10 months is pretty damn good.

There was an offer a while back whereby MBNA was giving 2.99 for the life of the loan, unfortunately they don't give this anymore otherwise it would be awesome.