Tesco Balance Transfer Offer - Misleading?

Gentoo365

Cornucopia wrote: »

It seems like this is another "catch" that needs to go the way of negative payment hierarchy.

Agreed.

The balance transfer was advertised as 0%. Yet the act of taking a balance transfer triggers an interest charge elsewhere, and the holding of a promotional balance removes the interest free period.

I am not sure it should be banned though as it would create a complicated set of rules regarding treatment of the words 'balance' and 'in full' in terms and conditions possibly resulting in all sorts of complications regarding 'purchase balance, 'promotional balance' and 'segregated balances'. Credit card T&Cs are complicated enough already.

A simpler approach that would make it 'fairer' would be to ensure that (like the fee) credit card companies are obliged to state the fact that extra interest may be charged on purchases and possibly estimate this (e.g. if you were to take this offer then you would incur interest on your existing balance of £x even if you paid off this existing balance at the next payment date)

I would not complain to say that the interest charge is 'unfair', I would complain that it was not clearly brought to your attention that the accepting of this offer would result in an interest charge which would otherwise not occur. Specifically stating that had this been brought to your attention you would not have accepted the offer, and hence would have been £xx better off.

Cornucopia

If people are being sold BTs as "0%", or worse "interest free", then I think it needs to be made really clear if their existing usage of the account will be compromised by taking up that offer.

It's not like their existing balance and/or transaction history is not clear to the bank at the point the BT is taken out.

thenudeone

Cornucopia wrote: »

If people are being sold BTs as "0%", or worse "interest free", then I think it needs to be made really clear if their existing usage of the account will be compromised by taking up that offer.

It's not like their existing balance and/or transaction history is not clear to the bank at the point the BT is taken out.

Another "nanny state" suggestion.

Alternatively, people could just understand things when they sign them.

sfax

thenudeone wrote: »

Another "nanny state" suggestion.

Alternatively, people could just understand things when they sign them.

I agree. Or simply read MSE's guide to BTs where it clearly states not to mix BTs and purchases.

The interest free period on the terms is already very clear and usually right at the top. Unless you pay off your statement balance in full, you will be charged interest.

If you add £1,000 as a balance transfer you will no longer be paying off your statement balance each month so therefore you will be charged interest on purchases.

People make assumptions and often get it wrong.

Cornucopia

I simply think that things should be fair and clear.

And why would we want a proliferation of credit cards simply because BTs and Purchases don't make a good combination under present Ts & Cs?

It would be simple for banks to properly segregate these balances - the only conceivable reason not to is to avoid honouring the 0% offer as fully as they might.

grumbler

sfax wrote: »

...Or simply read MSE's guide to BTs where it clearly states not to mix BTs and purchases.....

Clearly?
Personally, I find very confusing what the guide says:

Spend on a 0% balance transfer card and any repayments will go towards the spending first. To avoid interest you'll have to repay the full amount spent each month. This could get complicated, ...

Then it says:

...so if you need to make new purchases it'd be best to get a separate 0% Spending Card.

So, the guide doesn't explain where the problem lies and I don't think that the terms used like "complicated" and "it's best to" really state clearly not to mix.

sfax

grumbler wrote: »

Clearly?
Personally, I find very confusing what the guide says:
Then it says:
So, the guide doesn't explain where the problem lies and I don't think that the terms used like "complicated" and "it's best to" really state clearly not to mix.

OK, agreed, it should specifically point out the penalty of losing the interest free new purchase period. I was thinking more about the heading above it that says in a large font "Avoid spending on balance transfer cards"

Cornucopia

What about: A Balance Transfer may be 0%, but it will make new purchases incur interest from day 1 - don't spend on a card with a transferred balance.

callum9999

andymd wrote: »

I'll be expecting a knock on the door from the fraud squad then for failing to have fully understood the implications of each and every T&C, which no doubt have changed multiple times since I "fraudulently claimed to have read then" 10 years or so ago.

I'm not making up any T&Cs, I know what HSBC T&Cs say but in practice they do not charge me interest. I would be surprised if they write off interest every month just to "Shut me up"

I'm not disputing what the Tesco T&Cs say, however a wider point was whether this is fair or not. Terms and conditions can say whatever they like, doesn't mean it's right. Like the allocation of payments, these were in the T&Cs, it didn't make it right.

You didn't "fail to understand" - you completely ignored it despite agreeing with it. It is a completely standard term found on virtually (if not all) every single credit card. I don't read every t&c myself because I trust my understanding of how credit works. You clearly don't have a good enough understanding, so should really put more effort into learning more about it or reading the terms and conditions you're agreeing to...

HSBC's system didn't charge you interest on a whim, it was programmed to do so because you are liable for that interest. If HSBC are manually reversing it every month (or made a change to prevent it happening in the first place) then yes, they are just doing it to shut you up! (Or perhaps more accurately, trying to keep your custom!)

Yes it did make it right... It only became "wrong" when rules were re-written to change it.

andymd

Just got a letter back from Tesco. As many of you have pointed out they refer to their terms and conditions and insist that have applied these correctly.

However, they did acknowledge that it was not made clear in the balance transfer offer that it could cause me to incur interest on standard balances and they have taken the 'feedback on board'.

They have refunded the interest charged last month and will waive any I incur this month and they also made a further 'compensation' payment for the 'inconvenience caused'. The basically covers the BT fee, so I will transfer the balance to another card next month so I can continue to use the card just for purchases going forward.