Balance Transfers

Enigmatic_Me

Just a word of warning re how costly a balance transfer can be.

In Feb I signed up for the Amex BMI Plus card (£85 annual fee). I am a person who fortunately pays my balance every month. The card offered zero interest on purchases until June, not really relevant to my situation.

Where I have slipped up big time was taking up an offer of a balance transfer, 0% until Feb 2012. We had just come back from holiday and paid our hotel bill on another cc. So, I thought I would take advantage of the interest free until Feb 2012. Did a balance transfer of £1,000 which cost 3% (£30)

I thought (and this is where I kick myself) as long as I keep the balance below £1,000 until Feb 2012 I would not pay any interest. WRONG. Was shocked to see interest charges on my statement last month.

I phoned to query why I had been charged interest and the girl I spoke to said it was was difficult to explain but if you do a balance transfer you should NOT use the card for purchases as well. Well why did nobody tell me that when they arranged teh balance transfer?? Basically what has happened is any payments I have made have been offset against the balance transfer rather than the purchases so now even though my balance is below £1,000 I am being charged interest on the purchases

I am so angry with myself for not realising this. I paid off my balance in full (yes the supposed interest free until Feb 2012) this month, just checked my statement now and been charged another amount of interest.

So basically this card has cost me £85 fee, £30 balance transfer fee and £25 in interest. Needless to say I sent off a complaint letter 10 days ago and await a reply.

Just wanted to warn others in case anybody else was thinking of doing a balance transfer and using their card for purchases.

King_Of_Bling

sugarbabe61 wrote: »

Basically what has happened is any payments I have made have been offset against the balance transfer rather than the purchases so now even though my balance is below £1,000 I am being charged interest on the purchases

That shouldn't be happening. The repayments should go towards the spending you did after the 0% transfer.

Enigmatic_Me

King_Of_Bling wrote: »

That shouldn't be happening. The repayments should go towards the spending you did after the 0% transfer.

Really? This is the problem I am not really sure how this should work. As I said I have sent off a letter asking for an explanation and calculation but have not had a response yet.

Tixy

The repayments will be going against the purchase balance - they have to.
The thing that causes the interest to be charged is that you are charged interest on your purchases from the date you buy to the date you pay them off - thats because you don't get the normal 56ishdays interest free credit unless you clear the card in full.
The interest you have paid this month is trailing interest (the interest from the date of the last statement to the date you paid off your purchases).

peakoil_2

sugarbabe61 wrote: »

Just a word of warning re how costly a balance transfer can be.

In Feb I signed up for the Amex BMI Plus card (£85 annual fee). I am a person who fortunately pays my balance every month. The card offered zero interest on purchases until June, not really relevant to my situation.

Where I have slipped up big time was taking up an offer of a balance transfer, 0% until Feb 2012. We had just come back from holiday and paid our hotel bill on another cc. So, I thought I would take advantage of the interest free until Feb 2012. Did a balance transfer of £1,000 which cost 3% (£30)

I thought (and this is where I kick myself) as long as I keep the balance below £1,000 until Feb 2012 I would not pay any interest. WRONG. Was shocked to see interest charges on my statement last month.

I phoned to query why I had been charged interest and the girl I spoke to said it was was difficult to explain but if you do a balance transfer you should NOT use the card for purchases as well. Well why did nobody tell me that when they arranged teh balance transfer?? Basically what has happened is any payments I have made have been offset against the balance transfer rather than the purchases so now even though my balance is below £1,000 I am being charged interest on the purchases

I am so angry with myself for not realising this. I paid off my balance in full (yes the supposed interest free until Feb 2012) this month, just checked my statement now and been charged another amount of interest.

So basically this card has cost me £85 fee, £30 balance transfer fee and £25 in interest. Needless to say I sent off a complaint letter 10 days ago and await a reply.

Just wanted to warn others in case anybody else was thinking of doing a balance transfer and using their card for purchases.

I had exactly the sme thing happen when I was stoozing money on a Virgin CC and bought something on the highstreet with the same card. The girl on Customer Services even said the same thing about it 'being difficult to explain'.

I paid off the high street purchase and made sure that the stoozed 0% BT was still IO and then I never used that card again!

fd1972uk

I never shop with a card that I've got a 0% transfer balance with.


FD

chanz4

the halifax one gives 0% on purchases and balance transfers, I like that one for this reason

jimtrent

that sucks, but thats Amex for you. I would avoid them if possible!

johnnybrillo

Just a further word of warning re purchases on a balance transfer card - even though I'm paying off all my new purchases in full every month, Barclaycard are charging me interest on them "because I'm not paying off the full balance". When I complained they said that the only way to avoid interest was to pay off everything - including the balance transfer which isn't due until May 2012!

So I've now had to pay off everything to avoid interest charges for the next year.

I'm continuing to complain to Barclaycard that their 0% offer letter was highly misleading - but I suspect I'm wasting my breath.

As others have said - NEVER use a Balance Transfer card for new purchases!

chattychappy

johnnybrillo wrote: »

Just a further word of warning re purchases on a balance transfer card - even though I'm paying off all my new purchases in full every month, Barclaycard are charging me interest on them "because I'm not paying off the full balance". When I complained they said that the only way to avoid interest was to pay off everything - including the balance transfer which isn't due until May 2012!

So I've now had to pay off everything to avoid interest charges for the next year.

I'm continuing to complain to Barclaycard that their 0% offer letter was highly misleading - but I suspect I'm wasting my breath.

As others have said - NEVER use a Balance Transfer card for new purchases!

I realise you got caught out, but I don't think there is anything misleading at all.

Also you didn't need to pay off everything to avoid interest. Payments are applied to purchases first - you only needed to clear your purchases balance.

Also poor advice. It can often be well worth putting purchases onto a 0% BT card. It depends on the situation.

chattychappy

jimtrent wrote: »

that sucks, but thats Amex for you. I would avoid them if possible!

They are all the same.