Balance transfer scam

mcolqu

I recently did a Balance Transfer to my Egg Card at an introductory Rate of 1.9% for 9 months with the standard 2% charge up to a maximum of £50.

I have a Credit Limit of £15,000 and I transferred a balance of approximately £7,500 and was charged a fee of £50 which I knew about.

I have my Egg Card set up to automatically pay the minimum charge every month so as to avoid forgetting to make a payment on time and for the introductory rate to revert to the rip-off standard rate of 15%+.

Several Months down the road, I decided to check my balance and noticed that as well as the 0.16% monthly Interest (1.9% per annum), I was being charged a Merchandise Interest of 1.24% monthly (14.88% per annum). There was no explanation of this charge whatsoever on my statement.

I duly called Egg to find out what this charge was for and was told that it was Interest (charged at 14.88% per annum) on the £50 fee that I had been charged for the Initial Balance Transfer as they said this was not part of the Balance Transfer.

Obviously this £50 cannot be paid back without first having cleared the Balance Tranfer Balance which is being charged at 1.9% (£7,500 approx.) and as a consequence I will be charged at 14.88% on the £50 for the duration of the debt.

I wanted to bring this to everyones attention as I’m sure it will affect millions of people countrywide. Admittedly, interest on a £50 balance will not amount to a huge amount but it is the principle that is important as this was not explained to me in any way when I made the Balance Transfer and I'm sure will catch many other savvy moneywise people.

System

Hi, Martin’s asked me to post this in these circumstances: I’ve asked Board Guides to move threads if they’ll receive a better response elsewhere(please see this rule) so this post/thread has been moved to another board, where it should get more replies. If you have any questions about this policy please email [EMAIL="abuse@moneysavingexpert.com"]abuse@moneysavingexpert.com[/EMAIL].

Astaroth

You will find that almost all card issuers do this and it is not unique to Egg