MSE News: 0% credit card deals could change forever, for the worse

Fruit_and_Nut_Case

A_Flock_Of_Sheep wrote: »

It's a load of baloney the 0% "deals".

Yes it is 0% but you pay a "handling fee" to transfer a balance. What a fraud!!!

Since when did it cost £30 to transfer £1,000 from one place to another? Even by cheque it does not cost that much.

And why does it cost more to transfer £1,000 than £100? Do the extra electronic figures weigh more or something?

The only time these are not stupid is when it is 0% on purchases.

I think the banks do this to discourage stoozing. At the current typical rates of interest on savings it is barely profitable.

alexanderalexander

There is some odd reasoning going on in this thread.

woodbine wrote: »

the sooner they get rid of 0% deals the better,then the rest of us might end up paying a lower apr instead of subsidising the rate tarts

0% deals must make profit for the CC companies, or else they wouldn't offer them. If they were loss-making, they would be cut. The savvy rate tarts and stoozers do not constitute everyone – there are plenty of people who get into real debt on 0% deals and stay on the same card when it jumps to 20%interest.

A_Flock_Of_Sheep wrote: »

It's a load of baloney the 0% "deals".

Yes it is 0% but you pay a "handling fee" to transfer a balance. What a fraud!!!

Since when did it cost £30 to transfer £1,000 from one place to another? Even by cheque it does not cost that much.

And why does it cost more to transfer £1,000 than £100? Do the extra electronic figures weigh more or something?

The only time these are not stupid is when it is 0% on purchases.

Referring to it as a handling fee is a arguably a misdescription, but even with the fee it is so much cheaper than almost any other form of loan. And the credit card companies are very up-front about the fee they charge. The best balance transfer deals still offer exceptionally cheap credit, so I really don't think you can call them a 'fraud'.

JimmyTheWig

Yet I suspect this means the 0% deal is about to change forever as this could sweep across the card landscape, so every time consumers will need to check their likelihood of getting the promo deal before applying

I'm not convinced this is such a big change, certainly not such a big change for the worse.
Since the credit crunch started, reports on these forums have been that getting accepted for 0% deals has been harder and harder.

Does this change not mean, then, that they will now be able to accept about twice as many applicants as previously? That the people they previously would have accepted will still be given the advertised period and a similar number of "the best of the rest" will now be accepted but given not such a good deal.
It sounds like the "not such a good deal" is still a good deal, especially for someone who otherwise wouldn't get a 0% deal in the first place.

chattychappy

I think people shifting debt around should consider LOB deals if they can get them. They might cost more in the short term, but it does eliminate the risk of not getting a new 0% deal. I agree, there do seem to be fewer of them around.

davidgmmafan

Slightly off topic as it relates mainly to loans but I think this 'new' rule is madness. Previously with loans you had to give the rate advertised to 2 out of 3 customers, now its just 51%. I don't want to turn this into some anti EU rant but I can't really see the point of having such regulations where they replace a BETTER regulation...

Back on topic this does seem to make the issue of searches impacting on your ability to get credit more of an issue. You don't know if you will be accepted, or indeed what you will be offered, until you apply and yet if you apply to several different companies some will take this as a sign you are bad risk.

I expect we'll see an article in a while saying they're having a rethink as there are too many people with spotless credit histories with 0% offers so the banks aren't making any money out of them.

Superheavy

I don't see this as being that big a change, it will just see a lot more cases of people opening a card and then closing it shortly afterwards when they realise that they haven't been granted the balance transfer.

JimmyTheWig

davidgmmafan wrote: »

Back on topic this does seem to make the issue of searches impacting on your ability to get credit more of an issue. You don't know if you will be accepted, or indeed what you will be offered, until you apply and yet if you apply to several different companies some will take this as a sign you are bad risk.

But that hasn't changed with this new offer. The only change as far as I can see is that where previously you would have been declined, now you may be accepted on a not quite as good deal.