CAPITAL ONE Balance Transfer Warning

Teens_2

I wanted to warn you of misinformation I was given by Capital One. Their call centre assured me that a balance transfer was protected and free for a year, but this is not the case if you make any purchases.

I have been a customer for a while, paying off my full balance each month. They contacted me with an offer for balance transfer for 1 year with a 3% charge. Given I have an offset mortgage with a 6% interest rate, it made sense to take advantage of this and put the balance on my mortgage account.

I then continued to make purchases and paid off the full value of my purchases last month. This month I was charged interest on my purchases because they informed me that the purchase money had gone to reduce the balance transfer. The only way I can avoid paying interest next month (as I have already purchased this month) is to pay off the full balance transfer. I have therefore wasted a fee of 3%.

The moral - if you want to use the balance transfer - STOP PURCHASING IMMEDIATELY.

Ben1982

This is the case for most other cards too.
Always heed the advice Martin gives Never, ever, ever spend on a balance transfer card.

YorkshireBoy

Teens wrote: »

I have therefore wasted a fee of 3%.

Not necessarily, it depends on how much you've spent and the interest that will be charged over the BT duration. You need to work this out before paying off the entire balance (and turning your apparent loss into an actual loss). Who knows, you may even break even...which is still infinitely better than a 3% loss. Even a 2% loss would be a 1% gain under the circumstances!

The moral - if you want to use the balance transfer - STOP PURCHASING IMMEDIATELY.

Better still, only make the BT when you have a statemented zero balance.

Perhaps more fundamental though is to read (and understand) your T&C's, because the 'order of payments' is detailed in there.


Looking on the bright side though, you'll only get caught out the once with this particular 'trick'...I guarantee it!

Milarky

I received this offer - also on a 'main spending card' - and did my research. To take advantage of the offer I had to do the following things

1) Stop spending on the card immediately
2) Switch Continuous Payment Authorisations from for three organisations to a different card
3) Manually pay the current months transactions on the last day of the statement period (the DD took the previous statement balance a few days earlier) - so got a '£0.00' statemented balance instead.
4) Amend the DD (had to contact Capital One - no way to instruct them online) so that the next payment was for minimum amount not full amount
5) [Finally!] requested the balance transfer 'from' Egg on the first day of a statement period - giving maximum 56 days until first payment due.

There is also another 'barb' in this offer from Capital One. It says 0% for '12 months' and 'end date will be advised' after your make your transfer by letter - but no letter and when I asked them (before the BT was requested) how the end date was worked out they said '8 July 2009'. Now the offer letter is dated 'July 2008'. I did not receive the letter until 19 July, and (by choice) I put back the balance transfers request until 4 August - so I'll be getting 11 months - not '12'. But the letter (and a follow up letter too) is not express about the fixed end date - not possible in practice if the letter takes a few weeks to reach its target and (arguably) is plain misleading because it says things like 'get a whole 12 months 0% compliments of us'. That word 'whole' may come in useful if I now query this with Capital One - but when might be the optimum time (YB?) I'm thinking that I should query when the statement indicates the end is iminent - in about 9 months from now...

YorkshireBoy

Milarky wrote: »

That word 'whole' may come in useful if I now query this with Capital One - but when might be the optimum time (YB?) I'm thinking that I should query when the statement indicates the end is iminent - in about 9 months from now...

Hi Milarky,

The current Capital One introductory offers run until the "day after your [month] statement date". I wonder if these special offers are the same? If they are, you could move your statement date back a bit (28th sounds good!) to try and recover some of your front-end losses?

Anyway, I'd send them a secure message now (and save the reply), and then when the reply falls off your inbox after 90 days/6 months or whatever I'd send another one.

Hopefully both replies will say the same thing.

Even if they don't, IME with Capital One (albeit a couple of years ago now) they put the end date on your penultimate statement anyway.

londonTiger

I made a really silly mistake not so long ago, i thought all balance transfers were free, then I went ahead without looking at the small print. I found that they [barclaycard] charged me a 3% fee. Of course it was 0% balance transfer, so I didn't pay any interest as long as I made the minimum monthly repayment. But the 3% was a bit harsh.

I just signed up to capital one, 5% cashback seems nice, I'm gonna make use of it, do all my spending and just pay off the card. I realised my nectar american axpress is utterly useless, I get 0.5% cashback in nectar points effectively. 5% is more rewarding.