Cheap money transfer card launched
Posted in 'Personal Finance' by Kevin Pearce
27 July 2012
MBNA has launched a new card that allows new customers to transfer some of their credit card limit into their current account and pay 0 per cent interest for 15 months.
The Fluid card, as it has been named, has been brought to market because apparently there is a demand for such a product from within the UK market.
Will Becker, chief executive of Media Ingenuity says: ‘In conjunction with MBNA, we’ve created a card with an exclusive offer that can yield a substantial saving to consumers. This is a great card for people who are looking to get control of their finances and repay existing balances within the 15-month offer period.”
The APR on the Fluid Card is 15.5%
As always, it pays to check the small print the money transfer must be made within 60 days of opening the account and is subject to a 4 per cent fee.
Although this may seem no different than taking cash out and paying into your account, the fees are actually less than would be charged to do this.
An example of how this would prove beneficial is to clear an overdraft, for example. If your overdraft is interest free, there is no benefit in doing this, but if you are charged a high rate of interest (up to 20% in some cases) it could save you money in the long run. If you were on the verge of incurring penalties, it could be a good way to dig yourself out of that rut.
The interest free period is limited, so ensure you can repay it in the specified 15 month period to take advantage of this.
MBNA has launched similar products in the past and their success has led to the Fluid card with the specific focus on the money transfer to the current account.
The thirst for consumer credit is rising, with the latest figures from the Finance and Leasing Association showing a 9% increase in the amount of consumer credit taken out in April compared to the same month last year.
As a credit management tool, combining a balance transfer (for clearing credit cards on less favourable rates) with the ability to borrow cash (for debts or items that cannot be paid for by credit card) seems like a great idea, but it does tempt the less responsible to transfer money to their current account for non-essential items.
Essentially, as with anything, it is up to the user to act responsibly and take advantage of the greater flexibility offered with money/balance transfer.
For balance transfers to clear other cards (rather than to fund a current account), there are much more attractive deals available. The longest interest free transfer period is available from HSBC – at a very generous 23 months. A fee of 3.3% applies and the APR is 17.9%
Better still, the Barclaycard Extended Balance Transfer card has only a slightly shorter interest free period at 22 months, and a lower fee than the Fluid Card - at 1.45% compared to 1.5%, and an APR of 17.9%.
Kevin Pearce is a Credit Analyst at checkmyfile and has a degree in Media and Cultural Studies. You can contact Kevin at firstname.lastname@example.org
Kevin has a degree in Media and Cultural Studies from Southampton Institute. Prior to joining us, Kevin worked in the mortgage industry with GE. He covers several areas of credit and in particular the impact of the credit crunch on consumers.
Kevin is a Senior Credit Analyst at checkmyfile
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