Dormancy Fees

NickX

vet8 wrote: »

The trouble is, as loveandlight has said Amex offered very good LOB transfer deals and I have got less than £2,000 left on one of those deals. I do not want to use the card (in fact I have already burnt it as I only got it for the BT). If I use it that transaction will incur interest at a higher rate than the BT.

I think that if you are carrying a balance and are making minimum payments then the account is not classed as dormant, so this should not be necessary.

Is there any reason that you think that you do actually need to make a purchase to avoid dormancy ?

vet8

As I read it you have to make a purchase on the card to avoid the fee.

It says "We are introducing a dormancy fee of £20 per year which will be payable if you have not made any transactions (excluding cash advances and balance transfers) on your card in the preceding 12 month period.

I may be wrong, but that is the way it seemed to me.

NickX

vet8 wrote: »

As I read it you have to make a purchase on the card to avoid the fee.

It says "We are introducing a dormancy fee of £20 per year which will be payable if you have not made any transactions (excluding cash advances and balance transfers) on your card in the preceding 12 month period.

I may be wrong, but that is the way it seemed to me.

You may be right on the Amex Platinum card, I haven't looked at that one in detail, but the way I read the Santander Zero Terms and Conditions, carrying a balance and paying the monthly minimum repayments does not mean the account is dormant.

Anyone else able to clarify ?

bengal-stripe

loveandlight wrote: »

I, on the other hand owe them under £2k now and never use the card at all, as I have a life of balance rate of 2.9% and my balance is coming down in massive leaps and bounds every month so I'm happy:D

You are using the account (maybe not the card).

As NickX has pointed out, if there is a balance on the account and there are regular payments, the account is not dormant. The dormancy fee is for people who open an account, are given a limit of a few k and never use the account at all., or stop using it after a few years. That limit could have been allocated to someone who uses the account (and makes the CC some money).

I believe, that dormancy fee is probably less of a money-making scheme and more of an excuse to get in touch with a non-using customer again. Suppose someone has a dormant account, s/he owes the CC nothing, so when should the company try to get in touch again: after five, ten, twenty-five years. Now after a year, they slap twenty quid on the account and send a statement. If the reply is: “but my husband has died eleven months ago”, they probably scrap the fee and close the account.

Otherwise the account carries on ad infinitum.

CannyJock

loveandlight wrote: »

II, on the other hand owe them under £2k now and never use the card at all, as I have a life of balance rate of 2.9% and my balance is coming down in massive leaps and bounds every month so I'm happy:D

At 2.9% APR, I'd be paying them the minimum by direct debit and earning up to 6% AER on any extra instead Why be in a rush to clear such low APR debt when you've had such a rough ride from them? Milk them for every penny you can make out of them

Manty

I just received my letter today notifying me that they'll introduce this dormancy fee Oct onward, and because I did a low interest LOB several years ago it will apply to me as the card has not been used, will have to do a transfer to someone else now. :think:

CannyJock

Manty wrote: »

I just received my letter today notifying me that they'll introduce this dormancy fee Oct onward, and because I did a low interest LOB several years ago it will apply to me as the card has not been used, will have to do a transfer to someone else now. :think:

Can you not just buy a packet of crisps and pay for it using the card to avoid the dormancy fee? They won't be able to introduce it retrospectively. Why pay a 3% fee to move the money elsewhere for the sake of a few pence interest?

Manty

CannyJock wrote: »

Can you not just buy a packet of crisps and pay for it using the card to avoid the dormancy fee? They won't be able to introduce it retrospectively. Why pay a 3% fee to move the money elsewhere for the sake of a few pence interest?

Won't that affect the low interest balance transfer?

I was thinking of moving it to the Santander Zero as I've received a letter offering no fee transfer, so I guess it was good timing for me anyway, as i believe I can pay off the remaining balance over the next 12 months by transferring away.

CannyJock

Manty wrote: »

Won't that affect the low interest balance transfer?

I was thinking of moving it to the Santander Zero as I've received a letter offering no fee transfer, so I guess it was good timing for me anyway, as i believe I can pay off the remaining balance over the next 12 months by transferring away.

Won't affect existing BT's. Only difference will be the additional £0.49 @ purchase rate On an LOB deal this should be insignificant.

If you've got the A&L 0% promotion with 0% fee and you can repay the amount in full before the 0% promotion runs out, then that's a no-brainer. You BT your current LOB balance (plus residual interest) and repay it at 0% APR

Word of warning on the A&L 0% fee promotion, some people are only being awarded £250 credit limit - i.e. the absolute minimum to meet the "guaranteed" part of the advert. Hopefully you'll get a bit more - let us know how you get on.

INT1

Amex platinum

Received letter today advising introducing dormancy fees.

As said before I will put the odd thing on the card