Capital One Purchase Interest but No Purchases!

mab2000

Does anyone know how this works with virgin. Is the balance transfer fee classed as a purchase by them? Because from what i understand the payment hierarchy will pay off the 0% deal that ends first (so the purchases), so if i make sure my payments cover the balance transfer fee in full before the 0% on purchases end, will i avoid paying interest on the balance transfer fee?

leew

Paul_Herring wrote: »

This is a well known 'trick' by now - only the BT itself is at 0%, the %age BT Fee is not at 0%.

A few CC's have the payment hierarchy set up such that the BT fee gets paid off before the BT itself, the majority have it the other way where payments go towards paying off the BT first, leaving the Fee to incur (compounded) interest until the BT is paid off.

Says in the T&C's that it will allocate payments to a. Fees/charges/expenses b.Interest c.Payment protection d.Transactions

Can't believe how sneaky they can be :mad:

Paul_Herring wrote: »

Reply :
1) No, it's not clear and
2) Point out to them that there are no purchases in the balance - only a 0% balance transfer with associated fee, and
3) Demand an explanation on which particular items within the current balance are generating the interest.

Awaiting a response to this, demanded to know whats going on, not happy :mad:

Will post here what the response is!

leew

Hi again,

Here's the latest response to me asking them to explain where the interest is coming from - sorry it's rather long BUT unless i'm not reading it correctly explains nothing really :mad::mad:

Thank you for your message. I understand that you'd like to know how the purchase interest is being generated on your account. Please note that unless you pay the outstanding balance in full we will repay your monthly payments in the following category order: (a) fees, charges and expenses (b) interest (c) Payment Protection Insurance (d) transactions. The balances in each category will be repaid according to the interest rate that relates to them: (i) first (a) any promotional transactions made; and (b) any balances transferred during an initial period which have a separate interest rate for the life of the balance**, where your payments will be allocated to balances which attract the lowest interest rate first; (ii) then standard rates, where your payments will be allocated to balance transfers, then purchases, then cash withdrawals. We will always allocate your payments to any amounts which have already appeared on a statement before allocating your payments to any amounts subsequently applied to your account. (**The initial period is stated in your credit card agreement.) If we make any changes to the way we add your payments to your account, we'll let you know in advance. This means your monthly payments are clearing the balance transfer balance which is at 0%. Therefore, you still have purchase balance for which purchase interest is being charged on your account. To avoid any purchase interest being added, you need to clear your full balance before the due date every month. Please note that even if your full payment is a few pence short, the system charges interest to the account on the statement balance and any unbilled transactions that have reached the account by the statement date. I hope I've clearly explained this for you

My current balance as it stands is £597.18 of which £585.65 is the balance transfer + a £17.57 transfer Fee.

Can anyone explain why i'm being charged because i can't and Capital One are blinking hopeless :mad:

Paul_Herring

Once again, write back and repeat what I mentioned earlier:

3) Demand an explanation on which particular items within the current balance are generating the interest.

All they've done is reply with a form letter explaining what happens in general (i.e. for someone who doesn't only have a BT.) What you should be asking for is in your particular case what exact items are generating the interest.

cse

"you still have purchase balance for which purchase interest is being charged on your account" seems to be the totality of the explanation. However £5-odd of interest per month implies £500-odd of purchase balance, which clearly isn't there based on the figures in the original post

I'm guessing that this response was via secure message on the online account service? You might be confusing matters by mentioning 'purchase interest', a more direct question of "why am I being charged interest on my 0% balance transfer" might attract a similarly direct response. Failing that, a complaint in writing might be the way to go

cse

Found this on another thread: http://forums.moneysavingexpert.com/showthread.html?t=1939437&highlight=

You say that the offer deadline was 14th September which is also the date you BT was processed... now, if the wording on the original letter was 'transfer your balances before September 14th' or words to that effect then it may just be that you've missed the deadline and are being charged the standard BT rate instead.

I don't know what kind of chance there is of getting the promotional rate restored in borderline cases such as yours, but who knows - make a phone call, write a letter, they might be reasonable

leew

Paul_Herring wrote: »

Once again, write back and repeat what I mentioned earlier:

Hi again,

Thanks for all the advice, MUCH appreciated

Seem to be getting a standard reply back even after specifically asking what amount is generating the interest as you say, i shall be ringing them up and see if i can get more sense that way.


All they've done is reply with a form letter explaining what happens in general (i.e. for someone who doesn't only have a BT.) What you should be asking for is in your particular case what exact items are generating the interest.

They seem unable or unwilling to tell me which is driving me :mad::mad:

cse wrote: »

"you still have purchase balance for which purchase interest is being charged on your account" seems to be the totality of the explanation. However £5-odd of interest per month implies £500-odd of purchase balance, which clearly isn't there based on the figures in the original post

I'm guessing that this response was via secure message on the online account service? You might be confusing matters by mentioning 'purchase interest', a more direct question of "why am I being charged interest on my 0% balance transfer" might attract a similarly direct response. Failing that, a complaint in writing might be the way to go

Guess correct, i shall ask them via phone if i can get through what the situation is.

I shall be reading bits from this page as i speak to them!

Thanks again :beer:

leew

cse wrote: »

Found this on another thread: http://forums.moneysavingexpert.com/showthread.html?t=1939437&highlight=

You say that the offer deadline was 14th September which is also the date you BT was processed... now, if the wording on the original letter was 'transfer your balances before September 14th' or words to that effect then it may just be that you've missed the deadline and are being charged the standard BT rate instead.

I don't know what kind of chance there is of getting the promotional rate restored in borderline cases such as yours, but who knows - make a phone call, write a letter, they might be reasonable

Exact wording is 'available until 14 Sept'

It says elsewhere on the letter which i have infront of me 'Closing Date 14th Sept'

Should be ok shouldn't i? i know i was cutting it fine but i did do it on the 14th.

cse

You've definitely got a solid case... now all you need to do is speak to the right person who can actually resolve it, easier said than done! Best of luck

kataklysm

It does rather look like the 'purchase' (ie BT fee) went through on the 15th, and they're now charging you interest on it. That's why the amount of the charges vary, because they apply the payments to interest above other items, and the amount due in January is therefore less. Gotta say, that's some big old rate on £17

I'd be having serious words, that's a nasty tactic. And I'd also ask why the interest only started appearing on your Dec statement and not the previous three months? Maybe they think people don't bother opening later statements, so they hope to get away with it
Fishy. Is why I'd never do business with them.