Are 0% cards going to end?

MSE_Martin

There are more press stories that 0% cards offers will end. They stem from a report (sponsored by Capital One) which concludes it's flat rate cards everyone wants (which 'co-incidentally is exactly what Capital One promotes).

So what's the real score? 0% cards are here to stay, but there's a rapid growth of balance transfer fees, meaning it's no longer - who's 0% is longest?

The need for competitive advantage means BT fee-free cards will stay for the forseeable future, but'll be more difficult to spot.

Click reply to discuss.

Related Articles: Best Balance Transfers, Best Cards For Purchases

surfcat

I just got a 18month 0% on Capital One, so I'm happy!

I think the problem for the card cos will be that there are so many of them offering 0% that it will take several years before they are all closed.

Viz_2

I think they will come to an end as a lot of people keep transfering to another 0% card. The companies don't make any money.

The only flat rate i want is a 0% one !

There is an article about this in tomorrows Guardian newspaper "Jobs and Money" section. Also an article about cards such as Tesco Clubcard and Sainburys Nectar card.

Jacster_2

I used to work for a company that 'suffered' at the hands of us 'tarts' and senior bods would spend weeks huddled together concocting ways to stop us skipping about from deal to deal, taking all their profit with us.

It drove them nuts because the high cost of recruiting a new customer meant that no profit was made (on average) until 6-9 months had passed - by which time they may be skipping again!

The most popular devious tactic was to try and sell their product like a mobile phone contract with a tie in period and fines for early redemption. To my knowledge, this hasn't happened because this, and other potential tactics, were all eventually tempered by the fact that there are competitors out there who would lap up the business they would have thrown away. The fear was always that being too bloody-minded would mean an overall decline in customer numbers - and number of customers is so hugely important.

Don't know what will happen in future, but seems like these senior huddles are creating some action in the credit card industry...it could get interesting!

johnllew

From today's Special Briefing: Is the end nigh for 0% cards?

MSE_Martin wrote:

A Further Warning

Remember it's even more divisive. It’s not just three months that help recoup the profits. If you have a 0% card lasting six months, and you forget to move it by just one day, you’ll be charged an entire month’s worth of interest for that simple mistake. That means one day late, and they recoup half the cost!

I've never experienced this before. Which cards do this?

johnllew

johnllew wrote:

I've never experienced this before. Which cards do this?

Anyone? Martin?

deemy2004

The reason for an explosion in 0% rates was because of the Americans cutting interest rates to 1% and pumping excess liquidity into the worlds financial system, this flowed everywhere including allowing cheap financing of 0% offers. As US interest rates have been rising, money is becomign more expensive and the 0% offers are becomign tougher with conditions attached.

I guess it all depends how high US rates go and subsquently UK rates follow US rates higher.

At the very least US rates will nudge 3.5% in the current cycle, which is a big difference on 1% !

zcaprd7

johnllew wrote:

From today's Special Briefing: Is the end nigh for 0% cards?


I've never experienced this before. Which cards do this?

I think the all do - for purchases at least, if you don't clear the whole balance their 56 day interest free period goes and they charge interest from the day of the purchase(s) (even if you pay it all off bar £1!).

johnllew

zcaprd7 wrote:

I think the all do - for purchases at least, if you don't clear the whole balance their 56 day interest free period goes and they charge interest from the day of the purchase(s) (even if you pay it all off bar £1!).

I'm aware of that - Martin refers to (and I have highlighted) "If you have a 0% card lasting six months, and you forget to move it by just one day, you’ll be charged an entire month’s worth of interest for that simple mistake." That's not the same thing as missing the due date for a normal IFP.

deemy2004

Yep, you have to clear the account in full by the end of the Balance Transfer date - Which is usually NOT the same as the Statement date ! This catches a lot of people out, thinking they can wait till the statement pops through the letter box telling them to clear by such and such date... well by then its too late !

johnllew

deemy2004 wrote:

Yep, you have to clear the account in full by the end of the Balance Transfer date

I'm aware of that too - but what I haven't seen is a provision whereby you get charged a month's interest if you're one day late paying off a balance on a 6 month 0% deal. Which cards do this? It's never been in the T&Cs of any offer I've taken up.