Is this offer a con?

Supportlounge

I saw a banner on MySpace for a CapitalOne offer:

0% for 18 months on balance transfers
Simply spend £100 on purchases within the first 3 months of your account opening

* 0% on balance transfers for 6 months if you choose not to spend £100
* 15.94% p.a. variable for purchases. You will pay this interest rate
on all your purchases until you have repaid your balance transfer
* Easy balance transfers - 2% handling fee on the amount transferred*

*A handling fee of 2% of your balance transfer amount will be applied to your account. This fee will not be charged to your account until your 4th statement for any balance transfers you make during the first 3 months of your account. The interest rates per annum are variable for balance transfers after 18 months if you choose to spend £100 on purchases in the first three months after your account has been opened, otherwise after 6 months; and for purchases and cash withdrawals from the date of this Agreement. All applicants must be aged 21 or over, resident in the UK and receiving an income of more than £10,000 per annum. Credit is available subject to status and conditions.

https://www.capitalone.co.uk/web/raid/templates/formdual_temp_10_001.jsp?page_id=10400&context_id=2&step=1&product_id=2016

How frightening is that?

rbulph

Not frightening at all. Spend £100 on the card as soon as you get it and then pay that off when you get your first statement. Don't spend anything else on the card. Then (within three months of opening the account) make a balance transfer for as much as possible, giving you an 18 month loan at less than 2%p.a. Seems a very good deal.

Nytehawk

I have seen this thread before somewhere recently and I hope that I am wrong here because if you open up this account your other credit card balance is automatically transferred to your new account. If this IS the case then in typical CC rules they always pay off the transferred money first so the £100 spend accrues the full CC interest of 15.94%.
If this is not correct PLEASE let me know and I will apply right now :j :j

martin1018

Interesting.... it looks very much as if you will keep paying interest on your purchases till the balance transfer amount is paid off.

However the interest free period is a good one compared with many. And as long as you play their game it may be worthwhile.

For example - if you need a few thousand on a BT (and you get the credit limit) it may pay to buy something for £100.01 so that you qualify for the 18 months interest free. You will pay (I think but may well be wrong!) about £24 interest, plus the 2% BT fee which for 18 months of interest free may make it worthwhile. Obviously after 18 months you would be best advised to pay it all off and move onto the next deal that comes along.

But I wouldn't disregard it without looking into it, if you need that sort of boost to your finances.

Cara79

Hi

Yes, I have seen a similar thread regarding this recently. I understand that what you can do to get around this is.....

Day 1 - spend £100 on a purchase.

Day 31 - pay the £100 purchase off when you receive your statement

THEN, do the balance transfer, which would be 0% for the remaining 16-17 months.

Mind you, haven't done this myself.
x

Cara79

Have now found the previous thread: http://forums.moneysavingexpert.com/showthread.html?t=246891

And to quote Olly:

Hi guys,

This card has been mentioned in the tips, and is a good deal, provided you play the game. To quote martin:

"Luckily there is a way around this. Make £100 worth of purchases in the first month of the account, then pay it off in full when you get your statement, meaning you pay no interest. Only once that has cleared (call and check) do the balance transfer, and you’ll get 17 months of 0% for just the cost of the 2% fee."

http://www.moneysavingexpert.com/cgi...76509,#feefree


Olly

Nytehawk

Now that makes a lot more sense and reading the previous thread on this i can put 2 + 2 together and get 0% quidsin god old MSE people. Thanks to all........................ Gues what I am going to do next :j :T :j :T :j :T :j

jdavtz

But hang on - if the balance transfer fee isn't applied to the account until MONTH FOUR -

A handling fee of 2% of your balance transfer amount will be applied to your account. This fee will not be charged to your account until your 4th statement for any balance transfers you make during the first 3 months of your account.

you'll be paying interest on that for about fourteen months too!

kuohu

LOL didn't anyone read rbulph's post, #2 in the thread?

YorkshireBoy

jdavtz wrote:

But hang on - if the balance transfer fee isn't applied to the account until MONTH FOUR -



you'll be paying interest on that for about fourteen months too!

Your 4th 3% minimum payment will more than cover the 2% BT fee, and hence eliminate any interest on it (check the 'order of payments' in the T&C's).

Nytehawk

Let me just get this one straight, I apply for the card HOPEFULLY get accepted and when I receive my card I spend £100 within the first 3 months. I pay that £100 balance off in full at the end of that month I then transfer my current balance over from my current cc and get 16 - 17 months interest free. Is that about right or cant I see the wood for the trees here