Lloyd's TSB Platinum Card

chriswotton

I've recently got a 0% balance transfer Lloyd's TSB Platinum Card with a £2,000 credit limit, onto which I've already transferred a £1,400 Capital One balance - 3% fee = £42.

I thought the 0% balance transfer deal lasted 14 months, but reading through the card agreement it seems that it lasts for 14 months only if I make at least £100 of purchases on the card within 3 months - if I don't, then the 0% deal only lasts for 3 months. Completely separately, purchases are also at 0% for 3 months.

Would it work if I spent £100 on the card in the same month (aiming for this to be spending which I would have done anyway, but using this card instead of others) and then paid off all of the purchases at the end of the month? Would that satisfy Martin's rule of not spending on a balance transfer card, or would it break it? I'm figuring it wouldn't cause any problems, or would it actually cause problems because the balance transfer would be at a lower rate than the purchases (even though they are both 0%, because the balance transfer 0% deal would end later), meaning interest would start accruing on the purchases? I figure there must be something in it for Lloyd's for them to extend the balance transfer deal in return for me making a hundred quid's worth of purchases.

Any thoughts appreciated.

NickX

chriswotton wrote: »

Would it work if I spent £100 on the card in the same month (aiming for this to be spending which I would have done anyway, but using this card instead of others) and then paid off all of the purchases at the end of the month? Would that satisfy Martin's rule of not spending on a balance transfer card, or would it break it?

Well it does break Martin's Golden Rule because if you try and repay the £100 this will be deducted from the Balance Transfer Balance thereby leaving the £100 Purchase Balance accruing interest for the remainder of the 14 month Balance Transfer promotion.

However, the interest on £100 should not be excessive, around £16 over the course of a year, so you will probably still save money by having your Balance Transfer at 0% for the full 14 months.

exel1966

Very clever marketing by Lloyds to ensure you don't get a long interest free period.

What's in it for Lloyds is that your £100 will be accruing interest all the time whilst you still have a balance on the card as this payment will be the last thing to paid off on the card.
All payments you make up until the final £100 will be the BT funds being paid and not this £100 spend. Effectively Lloyds will be getting 11 months interest from you (if you keep it for 14 months) on the £100 and there's little you can do about it.
I'd advise either BT'ing the whole lot to another card prior to the 3 month time period which doesn't have any such clauses.

benf90

It's probably not worth BTing to yet another card so soon, as there would likely be another BT fee.

As NickX stated, the interest on £100 will most likely work out less than another BT fee. So spending £100 on the card will be the cheaper option, rather than transfering it again. Unless it's to a card which charges a BT fee of 1% or less.

It's a shame the OP didn't notice the clause before making the transfer. As, presumably, they would have been able to spend £100, pay it off, and then make the transfer to avoid any interest at all. Unless it specifically states the purchases must be done after the transfer.

mrmajika

Just to clarify, both the £100 purchase and the BT fee both accrue interest during the 'interest free' period.

exel1966

benf90 wrote: »

It's probably not worth BTing to yet another card so soon, as there would likely be another BT fee.

Still half a dozen cards out there without fees.

benf90

exel1966 wrote: »

Still half a dozen cards out there without fees.

I know, that's why I said 'likely' and not 'will be'. And then also went on to say 'Unless it's to a card which charges a BT fee of 1% or less.'

NickX

benf90 wrote: »

It's a shame the OP didn't notice the clause before making the transfer. As, presumably, they would have been able to spend £100, pay it off, and then make the transfer to avoid any interest at all. Unless it specifically states the purchases must be done after the transfer.

I believe this is a way around it. However by not Balance Transferring until you have spent £100, paid it off and to be absolutely sure received a zero balance statement, you are digging into your 14 month 0% Balance Transfer promotion. I don't think there is going to much in doing this or paying the interest on the £100 spend. It would involve some maths based on what Credit Limit you get and how much you earn by stoozing the cash.

YorkshireBoy

exel1966 wrote: »

Still half a dozen cards out there without fees.

There's only 4 on the stoozing site's list exel...and one of them is only 3 months with ICICI (the others are only 6 months).

I'd advise either BT'ing the whole lot to another card prior to the 3 month time period which doesn't have any such clauses.

Were you going to suggest a second option?



OP, Switching to another card will mean you've paid a £42 BT fee for only 2-3 months 0%. I calculate you'll incur £20.57 interest on the £142 interest accruing balance. Personally, I'd take the hit and stick with LTSB.

Just a thought...LTSB used to rebate £3.72 to the account in month 4 on this deal. I can't see it on their website now, but if that's still the case then the 'penalty' drops to £16.85 (as Nick said earlier), which is far less than the cost of BT'ing away for 12 months somewhere else).

chriswotton

Thanks everyone, some really appreciated advice here and it has helped clear it up for me.

benf90 wrote: »

It's a shame the OP didn't notice the clause before making the transfer. As, presumably, they would have been able to spend £100, pay it off, and then make the transfer to avoid any interest at all. Unless it specifically states the purchases must be done after the transfer.

That much is really annoying, especially since it doesn't seem to matter whether purchases are made before or after the transfer. Just a shame I only noticed this today when I went to set up a Tart Alert on this site for when the 0% BT deal expires.

mrmajika wrote: »

Just to clarify, both the £100 purchase and the BT fee both accrue interest during the 'interest free' period.

Yeah, they both accrue interest but instead of paying just the £29.00 minimum payment this month, I have paid £42.00. I had thought this would mean the BT fee wasn't accruing interest - but of course I have got this the wrong way round and it will accrue interest, because of lower interest rated debts being paid off first. I've got a sneaky feeling, though, that there was something either in the agreement or on the back of the first statement that made me think otherwise - I'll check this and let you know.


Based on what you've all said, I think I'm best off sticking the £100 on there and staying with them. The purchases are also 0% for 3 months from the start of the card (so up to 20 Nov) then they are at 14.88%, so it's £14.88 interest in a year, rather than say a 3% BT fee elsewhere which, on a balance of £1400 would be another £42.00. Think that's what I'm going with for the time being at least.

YorkshireBoy

chriswotton wrote: »

I've got a sneaky feeling, though, that there was something either in the agreement or on the back of the first statement that made me think otherwise...

http://www.lloydstsb.com/credit_cards/platinum_card.asp?WT.svl=CARDMAINplatinum1a&WT.ac=CARDMAINplatinum1a

Click 'summary box' and check out 'allocation of payments'. Maybe you incorrectly thought your BT fee was a 'charge' (a charge is actually a £12 fee, for example, for paying late)?

...then they are at 14.88%, so it's £14.88 interest in a year...

The 14.88% is the 'simple' rate, and does not take interest-on-interest (ie, compounding) into account.

When the simple rate is compounded up it equates to the 15.9% APR quoted.