Spotlight On: MBNA's balance transfer deal

 

Simon Read
Friday 03 August 2012 18:42 EDT
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The deal

The credit card company has cut the handling fee on its 20-month interest-free balance transfer card to 2.5 per cent.

Good points

It also offers 0 per cent on purchases for the first three months after opening the card.

Bad points

While 2.5 per cent is a bit better than the previous rate of 3 per cent, it still means anyone transferring £3,000 to the card will have to stump up £75.

Conclusion

Balance transfer deals can be a bit of a con trick. It's obviously attractive to be able to pay no interest on your debt, but the upfront fee coupled with a high go-to interest rate of 16.9 per cent can mean it's a costly mistake for many people. Rather than pay for interest-free deals, you'd do better paying off your card.

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