Credit card promotional balance transfer
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Thread: Credit card promotional balance transfer

  1. #1
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    Credit card promotional balance transfer

    Hi everyone, I have a question about balance transfers on credit cards. MBNA is offering a promotional transfer for 0.99% for 1 year.

    I am struggling to understand this "too good to be true" loan. My understanding is this transfers cash directly into my chequing account and I will only pay a total of 0.99% interest per year while making the minimum payments each month.

    The DUH part of me is saying take the largest transfer I can, up to my credit limit, for example $50k. Then park this in a 1 year GIC which I am finding at 2%. At the end of the year cash out my GIC, pay out the credit balance and collect 1% return for absolutely nothing invested.

    What am I missing here?


  2. #2
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    i thought balance transfers with promotional rates can only be done if transferred to another credit card.

    not too sure though, but the scenario you are presenting is valid. be aware of other restrictions on credit card balance transfers though and dont use it for if you have a balance already or plan to use it to make purchases, most of the time payments go first towards cash advance, interest, then purchases.

  3. #3
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    Will they charge you any service fee? They usually charge minimum $7.5 or 2% of transferred amount.

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  5. #4
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    If you read the "fine print", they technically have the right to call it. Oh and there's usually a fee associated with a balance transfer or cash advance that you have to pay as well.

    And that's exactly what CIBC did when I did that earlier this year. Because I almost maxxed out the card, my credit rating dropped (its my only debt!), and voila, the CIBC computers reduced my credit limit to $500 thinking I was some sort of trailer trash foreigner maxxing everything out and skipping the country. Leaving me in a huge overdraft.

    After a bit of talking to CIBC, and threatening to repay the thing in full and never do business with them again, they un-reduced my credit limit.

    But if I didn't have access to liquidity from other sources (ie: a margin account), I could've been in quite a pickle.

    Its no different than the sort of bank run that Home Capital is experiencing right now.

  6. #5
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    I wouldn't try to game them. They will get you going if not coming. They aren't dumb enough to leave a windfall opportunity for you.
    As we all know, a cc can be useful if used properly. If you use a credit card, have one that is competitive and works for your type of use, and always pay off the monthly balance.

  7. #6
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    Usually there is a transfer fee of 1% (up front) in addition to the 0.99% interest rate. Which makes a 2% GIC kind of useless.
    You can request it as a cheque or transfer to your bank account - they don't care where it goes.

    You have to pay a monthly amount. 1% of the balance? It goes against the balance of course.
    As others have mentioned, you can't use the card for anything else otherwise you'll be paying 20% or whatever it is on those purchases until you pay the full balance transfer off.

    It was very popular when MBNA had the 0% balance transfers for 15+months. There's hundreds and hundreds of posts on the red flag deals website on this topic, who to call, when to apply, what to do with it, etc etc.

  8. #7
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    My oldest did this a couple times while finishing up school ,the trick is make sure you can pay it off in full when it is up for renewal.

  9. #8
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    Quote Originally Posted by twowheeled View Post
    What am I missing here?
    Nothing. It's legit. Others have pretty much covered all the various other caveats. There's really no tricks, just make sure you don't use it for anything else and pay off the balance before the promo ends.
    The only further tip I have is that MBNA currently has a better 0% for 1 year deal.

    Either apply directly: https://apply.mbna.ca/applicationfor...1&locale=en_CA
    Or via one of these sites and get cashback: https://www.ratesupermarket.ca/credi...lus_mastercard
    https://www.greatcanadianrebates.ca/...-PlatinumPlus/

    And then even after you've done it once, you can keep doing it over and over. I've been doing the MBNA balance transfers for going on 7 years now, without issue. Assuming the offer still exists in August, I will continue on to the next round.
    Last edited by yupislyr; 2017-05-06 at 12:02 AM.

  10. #9
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    Quote Originally Posted by yupislyr View Post
    Nothing. It's legit. Others have pretty much covered all the various other caveats. There's really no tricks, just make sure you don't use it for anything else and pay off the balance before the promo ends.
    The only further tip I have is that MBNA currently has a better 0% for 1 year deal.

    Either apply directly: https://apply.mbna.ca/applicationfor...1&locale=en_CA
    Or via one of these sites and get cashback: https://www.ratesupermarket.ca/credi...lus_mastercard
    https://www.greatcanadianrebates.ca/...-PlatinumPlus/

    And then even after you've done it once, you can keep doing it over and over. I've been doing the MBNA balance transfers for going on 7 years now, without issue. Assuming the offer still exists in August, I will continue on to the next round.
    looks good to me and the rate is better than my margin rates on my questrade account. So you got the 0% promotional rate and got charged 1% for initiating the balance transfer?

  11. #10
    Senior Member sags's Avatar
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    How does transferring balances from one credit card to another free up cash to invest in a GIC ?

    Someone planted a tree a long time ago so I can sit in the shade.

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