MBNA cuts balance transfer fee

Updated: 
CREDIT CARDSMBNA now has one of the cheapest balance transfer credit cards around.

When you have credit card debt it can feel counter intuitive to take out another card to help manage it. But with a good 0% balance transfer credit card you can reduce the cost of the existing balance and get on your way to paying it back without having to battle mounting interest charges at the same time.

There are two catches to this approach; the length of time the balance transfer remains at 0% and the fee charged to arrange the set up.

And while the interest-free periods come close to two years, the transfer fees can hit as high as 3.9% of the sum you're transferring. Finding a deal that offers the best of both is therefore absolutely crucial.


Luckily more card providers are keeping the debt transferred interest-free for longer than ever before but the balance transfer fees on some cards can be as high as 3.9%, so it is important to find a good deal that offers the best of both.

MBNA's reduction
So borrowers will no doubt be pleased to hear that MBNA has cut the balance transfer handling fee on its Platinum card (which offers 20 months of 0% interest) from 2.99% to 2.85%. This means that for a balance of £2,000 instead of paying £59 to arrange the set up you can now pay £57.

Unfortunately, you're unable to transfer balances from other MBNA-linked cards like the Virgin Money and the AA credit card, which means you must look elsewhere for a new home for your debt.

Cheapest 0% balance transfer credit cards

So how does the handling fee reduction from MBNA compare? Take a look at the table below organised by lowest balance transfer fee to find out.

Credit card

Balance transfer fee

0% balance transfer period

Fee paid on transfer of £2,000

Barclaycard Gold Visa

1.25%

Nine months

£25.00

Barclaycard 21 month Platinum Visa

1.30%

21 months

£26.00

Barclaycard 22 Month Platinum Visa

1.45%

22 months

£29.00

Barclaycard 14/14 Month Platinum Visa

1.45%

14 months

£29.00

MBNA Platinum Credit Card

2.85%

20 months

£57.00

Fluid Credit Card

2.90%

16 months

£58.00

Halifax 20 Month Mastercard

3.00%

20 months

£60.00

Bank of Scotland Plus Mastercard

3.00%

18 months

£60.00

Halifax 17 Month Mastercard

3.00%

17 months

£60.00

Sainsbury's Nectar Credit Card

3.00%

15 months

£60.00

Halifax All in One Mastercard

3.00%

15 months

£60.00

Lloyds TSB Platinum Mastercard

3.00%

15 months

£60.00


Although MBNA has a competitive balance transfer rate compared to the market as a whole, the cut has done nothing to budge any of the Barclaycard deals, which dominate the top positions on the table. The MBNA Platinum Credit Card is bumped down to fifth place with a whopping four Barclaycard deals taking the lead.

However, the Barclaycard rock-bottom handling fee is a temporary half-price offer only available until August 9th, so you have little under a month to take advantage of this spectacular deal before the fees double across the range. For more information read this article: Barclaycard halves balance transfer fees.

Spotting the best deal
If you have a lot of debt you will want to pay as little as possible for the handling fee, but also have a suitable interest-free period where you can make repayments that go entirely towards reducing the balance.

The Barclaycard 22 month Platinum Visa offers the lowest handling fee for the longest interest free period. But this is something of an anomaly because of the half price offer and other good deals are harder to spot as they don't necessarily correlate like this.

For example, with a Halifax Mastercard you can get a 20 month 0% period with a 3.0% fee but for an identical interest-free period MBNA will only charge 2.85%. This may only be a difference of £3 on a £2,000 debt but if you have larger balances to transfer this saving becomes much more pronounced.

As always finding the best deal involved shopping around and considering what you need from a credit card.

Debt advice
Of course using balance transfer cards is only really a solution for those with a good credit history and able to take out another card. This is a shame considering those who are suffering with debt need the most help in reducing the cost to get on top of their finances.

If money problems are getting the better of you try using a debt advice service like National Debtline or the Consumer Credit Counselling Service for some advice on how to regain control of your money.

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