Incredible market-leading credit card that you may consider against a loan


Woman flying on a credit card

The MBNA exclusive offer only available through MoneySuperMarket boasts less than 5% interest, monthly repayments of nearly anything you like and a whopping 5-years to pay it all off. Is the best loan out there currently a credit card?

Something to keep in mind is that loans and cards are different. A loan provider will transfer money into your account with a fixed repayment schedule to clear it within the set period.

On a card, you are allowed to pay any amount from the minimum required payment to even the entire balance, however rates will usually be higher, the amount of money you can borrow lower and usually used for transferring existing debt or spending, rather than transferring money into your bank account.

What happens if you combine the two?

With this card you can take out a 5 year loan of up to £10,000 at a low 4.9% interest rate, the money will be paid into your bank account and you can keep the flexibility of a credit card when it comes to repayments.

What does this mean? If you're lacking a bit one month, you can pay a little extra the following month. But even better than that, if you clear or overpay it early, it means that you'll get charged much less interest overall.

There has to be a catch?

The new product from MBNA is a credit card, not a loan. This means that it comes with the conditions credit cards come with.

Firstly, if you are unable to clear the balance within the promotional period, what's left will be building up interest at a rate that's higher (in this case, 8.9%).

Second, in order to take advantage of the 4.9%, 5 year rate, you will need to transfer the money (or make purchases) in the first 60 days.

Thirdly, not everybody will be able to get the card, or the full amount of the loan (the term used here is "money transfer", which means the cash arrives in a bank account of your choosing, rather than transferring cash from another credit card as a balance transfer card works). The great news here is that MBNA has an eligibility checker which allows you to see ahead of time whether or not you're likely to be accepted.

Finally, you'll be charged a flat fee of 0.5% of the money you move in order to do it. That does not sound like a lot, spread over 5 years, it will take the interest up to 5%, it's something that doesn't apply when you take out a loan.

Man dreaming

Are there any other cards that can do this?

Yes, both Virgin and Tesco offer great money transfer credit cards but they do not offer the same lengthy period as the MBNA card.

Virgin and Tesco offer 41 and 40 months respectively, at 0% interest, but also come with weighty up-front fees (of around 4%) – this means no matter how long you take to pay off the balance, you'll pay at least 4% of it to the card provider.

These cards also comes with rather high APRs once the introductory period expires – of either 18.9% or 20.9%.

That said, if you don't need the entire five-years to pay off your balance, this might prove a cheaper option.

If you're planning to pay off inside two-and-a-half years, your best bet might be to focus on the fee, with Virgin's 32-month deal coming in cheapest with a fee of 1.69%.

How about loans?

You're able to beat the 4.9% MBNA interest rate if you are borrowing between £3,000 and £25,000 with a personal loan – but that would mean ensuring you qualify for the best rates.

Rates for these start at as low as 3.2% - but you will generally not be able to pay them back early without incurring charges.