'No more 'never, ever, ever, spend on a card you've done a balance transfer on' blog

Former_MSE_Penelope

This is the discussion to link on the back of Martin's blog. Please read the blog first, as this discussion follows it.

Read Martin's "No more 'never, ever, ever, spend on a card you've done a balance transfer on'" Blog.

Please click reply to discuss below.

JimmyTheWig

I think that it should be noted in bold towards the top of the article that this is something for the future and, until told otherwise you should "never, ever, ever, ever, ...".

I wonder how many people will have heard on the news that this is changing and think that it applies now? [I'm not one of them, incidentally, but I still think there will be quite a few.]

JimmyTheWig

Another possible stumbling block is residual interest. As you are not clearing the BT card then the "zero interest for paying off your balance in full two months in a row" rule will not kick in?

In fact, might this actually waive your right to the 56 days interest free period on purchases?

Richard019

I can't quite put my finger on what they are, but I'm sure there'll be some issue with having your direct debit for minimum amounts in place on the BT card and then making additional payments for your spending. I know some adjust their DD request if you make extra payments, and MBNA for one have really low minimum payments set up but I'm not sure how it impacts on the saving they'd be making over having seperate cards.

Where people have set it up to pay a set amount each month there's a need to make sure that it covers the new minimum payment. Using the example in the article of £2k BT and £2k spending. If the minimum payment was £100 and they'd set the regular payment to be £200 they might think it covers it. With the interest on the purchase it won't, they'll get a penalty and lose their promotional rate.

Richard019

JimmyTheWig wrote: »

Another possible stumbling block is residual interest. As you are not clearing the BT card then the "zero interest for paying off your balance in full two months in a row" rule will not kick in?

In fact, might this actually waive your right to the 56 days interest free period on purchases?

I don't think it would in this case, I read it as only being for purchases being made for payment over a longer period anyway. If you did it on a seperate card you'd still not be paying it off in full so you'd still be being hit by residual interest.

JimmyTheWig

Richard019 wrote: »

I don't think it would in this case, I read it as only being for purchases being made for payment over a longer period anyway. If you did it on a seperate card you'd still not be paying it off in full so you'd still be being hit by residual interest.

But you're still going to pay it off one day...

MSE_Martin

JimmyTheWig wrote: »

I think that it should be noted in bold towards the top of the article that this is something for the future and, until told otherwise you should "never, ever, ever, ever, ...".

I wonder how many people will have heard on the news that this is changing and think that it applies now? [I'm not one of them, incidentally, but I still think there will be quite a few.]

I thought I'd made it obvious -but will go and make it a bit more so - ta for the comment

Jo_Bloggs_37

:mad: I have taken out the new Zero Santander Credit Card. I applied for this card as I am at my overdraft limit and needed cash to go to visit my son in the U.S.A (that is another story, I will never fly B.A again!) when I tried to use my new credit card, the A.T.M would not give me any money, I telephoned the customer care number and was told that I had transferred two amounts totalling £2010.00 from my card. I told them that I had not done this and they said it must be their error. I was very concerned but was satisfied that they were going to sort this out. I have now arrived home a week early from the U.S due to B.A strike action and have received a card statement asking for me to make payment and showing the £2,010.00. Do I have to pay this?? should I contact the police as this is theft? Can somebody help me please? I am so worried, I have spoken to them but they say they can't help me.......

hayleythedaisy

Hurrah for the changes!!! Although they will have their downfalls, anything that helps niave people who don't understand that they can't put it all onto one card is good!!! Fed up of companies doing sneaky things to get more money out of us!!!

irrelevant

I think I've got it - if, say, I have a card with a hefty but 0% BT on it, and need to spend a sum which will take several months to pay off, using minimum payments on both it will be better to put it all on one card

e.g. with two cards:
card 1, £1000 0% min payment £50
card 2, £1000 18% min payment £50

So I'm only paying £50 a month off the expensive debt, and probably getting interest of almost that much added back on.

but with one card
£1000 at 0%, £1000 at 18% min payment £100.
The full £100 will comes off the balance that's getting interest charged on it, so that part will be paid off faster, and will therefore charge me much less interest.

Gotcha!

jagu

I'm not so sure this is a good thing. Zero percent balance transfers exist because the card companies know most people won't avoid spending on their card once they've transferred the balance. Or enough people to subsidise the operation, at least.

I suspect zero percent balance transfers will now disappear and those of us clever enough to read MSE and keep these cards in a drawer while we clear the balance will no longer have the option.