Cunning credit card holders who exploited a loop hole in MBNA card rules to make money by building up credit card debt and transferring it to high interest savings accounts have had their ruse rumbled.
MBNA will no longer recognise credit card balances as balance transfers, but from September will treat them as money transfers instead.
Unlike a balance transfer, this will mean borrowers will have to pay a two per cent charge and interest will accrue on the debt as soon as it is transferred.
The tactic first emerged among savvy credit card holders when zero per cent credit cards became widespread in early 2000. When the introductory zero per cent offer comes to an end, they either withdraw the cash to pay the credit card balance or switch to a new zero per cent deal.
An MBNA spokesman, speaking to This is Money, denied the move was designed to prevent what has become known as 'stoozing'. He said: "We had this planned anyway, it simply makes sense because transferring the money to a bank account is essentially the same as making a cash withdrawal".
Egg will now be one of the only credit cards in the UK to allow the transfers. It remains unknown whether other branded MBNA cards, such as Virgin Money and Abbey will follow suit.
Credit card ruse busted
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