Asda Credit Card: Strong warning

NOWSE

This is a strong note of caution for those taking up the Asda card offer of 0% balance transfers for 12 months, which they feature strongly in their literature. Once you use your card for any other transactions you will incur interest on those transactions unless you pay off the whole balance, including the balance transfers.

In November I took them up on their offer and did a balance transfer. I also used the card for purchases. When the statement came I made a payment that was more than both the purchases and the balance transfer handling fee, meaning that the only money outstanding related to the balance transfer. My latest statement shows an entry for "interest for purchases". As my staement states "we will allocate your payments to pay balances relating to higher interest rates first" I phoned Asda Money. I spoke to the call handler and his supervisor and they told me that the terms and conditions say that the whole balance becomes due once I make a purchase if I want to pay no interest. The supervisor accepted that the two phrases might have a contradiction in them but said that the T & Cs were what guided them. Since coming off the phone I've looked up the T & C that he quoted and, in view of the phrase that I quoted from the statement, I cannot see that it clarifies the position when 0% balance transfers apply.

8.3 We will not charge Interest on Standard Purchases shown on your Statement if you pay off the whole Outstanding Balance shown on that Statement, and on the Statement before, by the payment due date shown on your Statement.

I believe that wording on Asda's statement is very misleading, verging on a lie. The way that Asda have allocated funds seemed to have ceased by other card issuers some time ago.

[Deleted User]

Asda are correct. They operate the same as every other card out there. You only pay no interest if you pay off your balance in full each month.

stephane_2

I think you will find that Asda is correct is you read the T&C....and it's not despite the fact that it has been said countless times on those forum NEVER to spend money on a balance transfer card....

NOWSE

Deleted_User wrote: »

Asda are correct. They operate the same as every other card out there. You only pay no interest if you pay off your balance in full each month.

No they don't. I did the same thing with a Post Office credit card over the summer. I took a balance transfer and used the card for purchases. As long as I covered the value of the purchases each month I paid no interest

[Deleted User]

In which case they messed up or you also had 0% on your puchases. Their terms are the same as Asda -

You will not pay interest on new purchases (e.g. new purchases shown on your statement) if you pay your balance in full and on time.

BenL

http://www.moneysavingexpert.com/credit-cards/balance-transfer-credit-cards





Avoid spending on balance transfer cards

Credit cards allow us to do a number of different things such as spend, shift balances or withdraw cash. In 2011, the rules on where your credit card repayments are allocated changed.
Banks must now put any repayments towards the most expensive debts first. This means that spending on a balance transfer card isn't as bad as it used to be, but can still cost you if you're not careful.
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, so if you need to make new purchases it'd be best to get a separate 0% Spending Card.

Hominu

NOWSE wrote: »

No they don't. I did the same thing with a Post Office credit card over the summer. I took a balance transfer and used the card for purchases. As long as I covered the value of the purchases each month I paid no interest

I had a Post Office credit card last year and the documentation clearly said that as long as I made the minimum payment and cleared the balance within the promotional period I would pay no interest.

You were likely to have been offered a similar promotional offer.

grumbler

Hominu wrote: »

I had a Post Office credit card last year and the documentation clearly said that as long as I made the minimum payment and cleared the balance within the promotional period I would pay no interest.

It wash 0% on transfers and purchases then.
Otherwise it's simply impossible to make minimum payments and not to pay any interest on purchases

andymd

I had a similar problem with Tesco. See thread - 4384477 (Can't link it as I'm a new user.

The advice I got was not to mix purchases and balance transfers, which I will now follow, however, I agree the offers are misleading.

Like you, I have also found that in practice, some banks would not charge the interest like Asda and Tesco (e.g HSBC, Post Office)

I complained to Tesco and although they stuck with their T&Cs, they refunded the interest for last month and any I incur next month (goodwill) and made a further compensation payment. So you should try to go down that route.

Cornucopia

grumbler wrote: »

Otherwise it's simply impossible to make minimum payments and not to pay any interest on purchases

IIUC, that is not the issue.

This is the issue:

I take a 0% balance transfer. I then make purchases on the card. I then pay off those purchases in full within the interest free period, but I am still charged interest on them.

I appreciate the various warnings about this, but I really don't understand why people are defending it. It just seems wrong.

andymd

Cornucopia wrote: »

I appreciate the various warnings about this, but I really don't understand why people are defending it. It just seems wrong.

Completely agree! And I suspect in my case Tesco weren't that sure about the fairness of their T&Cs, refunding the past and future interest and paying compensation.