Tesco 0% balance transfer - why such a huge minimum payment wanted?

juliat

hi, I asked to transfer £8,500 (well within totally unused credit limit) to a new Tesco card, advertised at 0% for 6 months and they wanted about £290 per month minimum payment! can that be right?? Surely at 0% it should be far less? Can anyone explain please.

JA1000

Did you ask what the min payment % was going to be.

It's free money and you will be paying it back nice and quickly.

dfh

The minimum payment varies between 2 and 4% of the amount owed.

cifpower

Does the first payment include a transfer fee?

chattychappy

juliat wrote: »

hi, I asked to transfer £8,500 (well within totally unused credit limit) to a new Tesco card, advertised at 0% for 6 months and they wanted about £290 per month minimum payment! can that be right?? Surely at 0% it should be far less? Can anyone explain please.

Their website is showing 3% minimum payment and 2% handling fee on introductory offers.

The balance outstanding should be £8,500 x 1.02 = £8670
So the min payment should be 3% of this which is £260.10.

Do you have anything else on the card?

From their website and the figures given, it seems that the fee isn't added to the minimum repayment. So I can't explain the £30 difference.

CannyJock

juliat wrote: »

hi, I asked to transfer £8,500 (well within totally unused credit limit) to a new Tesco card, advertised at 0% for 6 months and they wanted about £290 per month minimum payment! can that be right?? Surely at 0% it should be far less? Can anyone explain please.

Yup, what chatty says - minimum payment % and transfer fee % are pretty clear on their website and their summary box - http://www.tescofinance.com/personal/finance/finance/creditcards/clubcc/summary-box.jsp

Please tell us that you didn't think the 0% part meant you didn't need to pay anything for 6 months?

unidentified

On the odd occasion (at least a few years ago) I found that the complete transfer fee was also requested at the time of the first monthly payment which was a bit painful on the wallet.

I don't think this is so anymore (maybe someone else can confirm?)

But it definitely wouldn't appear to be so above anyway as the figures were given

ILW

juliat wrote: »

hi, I asked to transfer £8,500 (well within totally unused credit limit) to a new Tesco card, advertised at 0% for 6 months and they wanted about £290 per month minimum payment! can that be right?? Surely at 0% it should be far less? Can anyone explain please.

The interest rate and minimum payment are not connected.

juliat

da yeah actually I do think 0% means 0%
24k cash transfer with MBNA at 0% (or it could have been 0.9%) cost me a min. payment of £25 per month, but I suppose Tesco need the money.
thanks for your replies.

YorkshireBoy

juliat wrote: »

da yeah actually I do think 0% means 0%
24k cash transfer with MBNA at 0% (or it could have been 0.9%) cost me a min. payment of £25 per month, but I suppose Tesco need the money.
thanks for your replies.

Ah I see. You thought all card providers operated the same way as MBNA did (they don't now, they charge 1% of the balance). There's a lesson there...familiarise yourself with the T&Cs (or at least the summary box) before applying for a product?

Some would argue Tesco are being responsible in requiring a 3% payment, whereas we all know why MBNA had such a low £25 payment* (and still do to a degree with 1%)...and that was to try and ensure cardholders still had a very large balance at the end of the intro period when the customary "we're increasing your rate to 24.9% APR" letter dropped onto the doormat.


* It was just £5 when I started stoozing their cards some 5 years ago.