Ulster Bank charging interest on 0% balance trans fee

zebidee4418

Was going to close my Ulster Bank visa card at the end of a 0% bal transf deal last October. To keep me, they offered a further 0% deal for 6 months with a 2% fee, which I took them up on for about £4,500. I now find that they are treating the £90 fee as a purchase and charging me interest on it. I was surprised at this as I hadn't heard of it before. It was not mentioned on the phone when I took up the deal. Called the UB, they said interest was being charged on the fee and it was correct but "it didn't usually last more than a couple of months" - this confused me even more! They couldn't explain on the phone exactly how the interest was calculated and said they would write to me explaining it. I called the FOS, they were also surprised and suggested I made a formal complaint to the UB if the explanation did not arrive or was unsatisfactory.
Anyone come across anything similar or care to comment?

Numenor

Yep, HSBC are doing something similar to me. Basically they state that the balance transfer fee is not a balance transfer, it is a payment. Therefore it attracts the normal rate of interest. Still, better to pay 15% on a two-figure sum than pay interest on the whole balance.

lisyloo

Bear in mind that if you make a payment it will pobably be applied to the 0% balance transfer money first and not the fee.
Therefore you'll be charged interest on the fee until the entire balance is cleared.

This is why there is Martins advice to never ever ever spend on a BT card (although in this case it wasn't deliberate).

YorkshireBoy

lisyloo wrote: »

Bear in mind that if you make a payment it will pobably be applied to the 0% balance transfer money first and not the fee.
Therefore you'll be charged interest on the fee until the entire balance is cleared.

I think I've seen it posted that with RBSG cards the interest only appears on the first two statements (initial + residual) due to a favourable order of payments (for fees, not standard purchases).

NickX

YorkshireBoy wrote: »

I think I've seen it posted that with RBSG cards the interest only appears on the first two statements (initial + residual) due to a favourable order of payments (for fees, not standard purchases).

That was the case with my Ulster Bank repeat so I assume it applies to all RBS run cards.

zebidee4418

Thanks the comments, all points noted. I'll wait for their letter and post again with an update.