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MBNA launches low-fee balance transfer credit card
MBNA has launched the Everyday credit card, offering 17 months interest-free on balance transfers with a great low balance transfer fee of 2%, as well as seven months 0% interest on new purchases.
The card also comes with a relatively low APR of 11.9%, which will be helpful once the introductory offers end and any remaining balance on the card starts accumulating interest.
Similar to the Halifax All in One MasterCard, the new MBNA credit card is attempting to cover all bases. But in terms of balance transfer fees the card should make an impact in an overcrowded market.
How it compares
At the moment the balance transfer credit card market is dominated by providers competing on the length of the interest-free period on a balance transfer rather than the cost of actually transferring that balance.
The Barclaycard 23-Month Platinum Visa for example offers a period of 23 months as does the HSBC Visa (though only to existing current account holders).
Each card offers a pretty generous amount of time to get your finances back in order- nearly two years- but both come with costly fees. Barclaycard charges 2.8% and Tesco charges 2.9% to transfer balances over from existing credit cards.
Why the fee is important
The result is that a lot of the market leading cards are offering more time which doesn’t necessarily save you more money.
Here are the current best balance transfer credit cards that have interest-free periods of 12 months or over.
Card | 0% period on balance transfers | Balance transfer fee |
23 months | 2.8% | |
HSBC Visa* | 23 months | 3.3% |
22 months | 2.9% | |
22 months | 2.6% | |
22 months | 3.2% | |
22 months | 3.2% | |
22 months | 3.5% | |
20 months | 2.85% | |
20 months | 3% | |
Nationwide Select Credit Card* | 20 months | 3.1% |
20 months | 3.1% | |
Bank of Scotland Plus MasterCard | 18 months | 3% |
MBNA Everyday Credit Card | 17 months | 2% |
17 months | 3% | |
Barclaycard Platinum Low Fee | 16 months | 1.6% |
15 months | 1.5% | |
15 months | 3% | |
15 months | 1.5% | |
15 months | 3% | |
14 months | 2.98% | |
14 months | 2.9% | |
12 months | 3% |
*Only available to current account holders
But this is what the table looks like when you arrange the deals according to the cheapest fee being charged for balance transfers.
Card | 0% period on balance transfers | Balance transfer fee | Fee paid on £2,500 balance transfer | Fee paid on £5,000 balance transfer | Fee paid on £7,500 balance transfer |
15 months | 1.50% | £37.50 | £75.00 | £112.50 | |
15 months | 1.50% | £37.50 | £75.00 | £112.50 | |
Barclaycard Platinum Low Fee | 16 months | 1.60% | £40.00 | £80.00 | £120.00 |
MBNA Everyday Credit Card | 17 months | 2% | £50.00 | £100.00 | £150.00 |
22 months | 2.60% | £65.00 | £130.00 | £195.00 | |
23 months | 2.80% | £70.00 | £140.00 | £210.00 | |
20 months | 2.85% | £71.25 | £142.50 | £213.75 | |
22 months | 2.90% | £72.50 | £145.00 | £217.50 | |
14 months | 2.90% | £72.50 | £145.00 | £217.50 | |
14 months | 2.98% | £74.50 | £149.00 | £223.50 | |
20 months | 3% | £75.00 | £150.00 | £225.00 | |
18 months | 3% | £75.00 | £150.00 | £225.00 | |
17 months | 3% | £75.00 | £150.00 | £225.00 | |
15 months | 3% | £75.00 | £150.00 | £225.00 | |
15 months | 3% | £75.00 | £150.00 | £225.00 | |
12 months | 3% | £75.00 | £150.00 | £225.00 | |
Nationwide Select Credit Card* | 20 months | 3.10% | £77.50 | £155.00 | £232.50 |
20 months | 3.10% | £77.50 | £155.00 | £232.50 | |
22 months | 3.20% | £80.00 | £160.00 | £240.00 | |
22 months | 3.20% | £80.00 | £160.00 | £240.00 | |
22 months | 3.50% | £87.50 | £175.00 | £262.50 |
*Only available to Flexclusive current account holders
As you can see some of the market-leading cards that have the longest interest-free period on balance transfers will cost you far more for the sake of those extra months.
The Halifax 22-Month MasterCard offers nearly two years to pay back what you transfer before applying any interest but on a £7,500 debt will charge £262.50 for the privilege!
If you had focused your hunt on the longest 0% deal you might not have spotted that the four deals below are the cheapest and offer a suitably long interest-free period on what you transfer.
The cheapest
Currently the Fluid Card and the Lloyds TSB Platinum MasterCard offer the cheapest balance transfers at just 1.5%.
Both these cards offer a generous 15 months interest-free for balance transfers. On purchases the Fluid card offers five months at 0% while the Lloyds TSB card only offers three. In terms of APR the Fluid Card trumps with a rate of 15.9% while Lloyds has 17.9%.
After these two is the Barclaycard Platinum Low Fee card which comes with a better 16 months interest-free on balance transfers and three months 0% on new purchases. But the APR on this card is 18.9% which could leave you exposed after the introductory period ends.
The MBNA Everyday credit card features next and compensates for being a bit more expensive with a longer 0% period on both purchases and transfers as well as a much cheaper APR of 11.9%.
Making a choice
The cost of the transfer on a balance transfer credit card is important as this will be added to the debt you bring over so it's worth doing all the relevant calculations before making your choice.
If you think you can clear your debt within 15, 16 or 17 months it makes sense to go with Fluid, Lloyds, Barclaycard or MBNA instead of a card that offers nearer two years. However, if you have an existing debt with any of these top providers you will have to look elsewhere.
Too much debt?
A low cost balance transfer card that has a significant interest-free period is a good first step in taking control of your finances.
But if you need more help contact the Consumer Credit Counselling Service or National Debtline for other ideas to resolve your money problems.
