Money Insider: Cut overdraft costs with MBNA credit card

with the Government's cost-cutting strategy looming on the horizon, many people are already tightening their belts and preparing their own finances for what could be a bumpy couple of years.

If you take a close look at your budget to see where you can make your own cut backs, there will be some obvious costs that can be eliminated just by spending a few minutes reading through your last few month's bank statements.

For some it will be the infrequently used gym membership that rightly gets the chop or perhaps insurances that you had forgotten about but no longer need, but for some people it will be the cost of their overdraft that is taking an overly large bite out of their disposable income.

If this sounds like you and you're looking to spend less on being in the red, then the new MBNA Platinum credit card launched this week could well be the answer. The card offers balance transfers, and more importantly money transfers, at a promotional rate of just 1.9 per cent for 12 months.

While interest-free offers enabling you to switch balances from one piece of plastic to another are almost ten a penny, the option to use a money transfer to clear non-card debts is a rare opportunity to save on expensive loan or overdraft interest.

Unlike a balance transfer transaction, a money transfer can be paid into your current account, thus giving you more flexibility and opportunities to reduce your banking costs.

The other big plus point with this particular deal is that the usual hefty money transfer handling fee of 4 per cent is waived for transfers made within the first 90 days.

To put the potential cost savings into perspective, a £2,500 personal loan from NatWest could set you back £272.96 in interest in 12 months or an overdraft of the same size with HSBC just shy of £498, whereas to borrow this sum with MBNA at 1.9 per cent for 12 months will cost you just £47.50 in interest. (The standard 4 per cent handling fee in this scenario would have normally set you back £100).

This is an excellent opportunity to get to grips with your overdraft and save some serious money in the process. The interest rate on the card reverts to 16.9 per cent APR typical after 12 months, so make the most of the low rate and knock your debts into shape while you can.

If its credit card debt rather than overdraft that you're looking to switch, then take a look at the latest 16 month interest-free deal just launched by Barclaycard with its Platinum card. Transfers are subject to a one off 2.90 per cent fee, minimum £7.25.

If you're smart, you'll have cleared your balance or at least made big inroads within the promotional period, if you don't then you're exactly the sort of profitable customer that credit card providers dream of.

Great deals available for canny savers

we've seen plenty of activity in the savings market this week, with some good new deals appearing across a range of product areas.

Aldermore has increased the rates on its two and three-year bonds and sits top of the best buys for both terms with fixed rates of 3.75 per cent gross and 4.15 per cent gross respectively. Both bonds offer a monthly interest option, are available online, by post or by phone and can be opened with a minimum balance of £1,000.

For a shorter-term fixed rate check out the new Online Bond from the Post Office which pays 2.80 per cent AER fixed for 12 months and, unlike most other best buy one-year bonds, gives you the chance to receive interest monthly.

If you're looking for a decent rate whilst still being able to access your cash without notice or penalty, the new online saver also from Post Office is definitely worth a look. The best buy rate of 2.75 per cent AER includes a bonus of 1.25 per cent for the first 12 months and allows unlimited access to your cash whenever you need it. You can open the account with as little as £1 and can opt to have your interest paid monthly or annually.

For younger savers, Northern Rock has started a new version of its "Little Rock" savings bond. The first edition of this account paid a very impressive 5 per cent fixed for three years and not surprisingly was withdrawn from sale due to overwhelming demand after just seven days. The latest version pays a lower but still very attractive rate of 4 per cent, again fixed for three years available for deposits from £1 to a maximum of £20,000. The account is available by post or in branch only.

Andrew Hagger is a money analyst at

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at

Arts and Entertainment
Reimagined: Gwyneth Paltrow and Toni Collette in the film adaptation of Jane Austen's Emma
Arts and Entertainment
Jesuthasan Antonythasan as Dheepan
Cannes 2015Dheepan, film review
Richard Blair is concerned the trenches are falling into disrepair
newsGeorge Orwell's son wants to save war site that inspired book
Arts and Entertainment
The pair in their heyday in 1967
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Guru Careers: Software Developer / C# Developer

    £40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

    Neil Pavier: Management Accountant

    £45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

    Sheridan Maine: Commercial Accountant

    £45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

    Laura Norton: Project Accountant

    £50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

    Day In a Page

    Abuse - and the hell that came afterwards

    Abuse - and the hell that follows

    James Rhodes on the extraordinary legal battle to publish his memoir
    Why we need a 'tranquility map' of England, according to campaigners

    It's oh so quiet!

    The case for a 'tranquility map' of England
    'Timeless fashion': It may be a paradox, but the industry loves it

    'Timeless fashion'

    It may be a paradox, but the industry loves it
    If the West needs a bridge to the 'moderates' inside Isis, maybe we could have done with Osama bin Laden staying alive after all

    Could have done with Osama bin Laden staying alive?

    Robert Fisk on the Fountainheads of World Evil in 2011 - and 2015
    New exhibition celebrates the evolution of swimwear

    Evolution of swimwear

    From bathing dresses in the twenties to modern bikinis
    Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

    Sun, sex and an anthropological study

    One academic’s summer of hell in Magaluf
    From Shakespeare to Rising Damp... to Vicious

    Frances de la Tour's 50-year triumph

    'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
    'That Whitsun, I was late getting away...'

    Ian McMillan on the Whitsun Weddings

    This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
    Kathryn Williams explores the works and influences of Sylvia Plath in a new light

    Songs from the bell jar

    Kathryn Williams explores the works and influences of Sylvia Plath
    How one man's day in high heels showed him that Cannes must change its 'no flats' policy

    One man's day in high heels

    ...showed him that Cannes must change its 'flats' policy
    Is a quiet crusade to reform executive pay bearing fruit?

    Is a quiet crusade to reform executive pay bearing fruit?

    Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
    The King David Hotel gives precious work to Palestinians - unless peace talks are on

    King David Hotel: Palestinians not included

    The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
    More people moving from Australia to New Zealand than in the other direction for first time in 24 years

    End of the Aussie brain drain

    More people moving from Australia to New Zealand than in the other direction for first time in 24 years
    Meditation is touted as a cure for mental instability but can it actually be bad for you?

    Can meditation be bad for you?

    Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
    Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

    Australia's first-ever Eurovision entrant

    Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine