WARNING - TESCOS 0% BT OFFER -BT Fee accrues interest

Wol2

Please be very careful if you accept a current 0% Balance Transfer offer with this provider as they add the BT fee onto the balance but charge interest on the fee. Trying to make an accurate early debit payment to ensure interest isn;t charged is not possible.

This is what has just happened to me - and I have been a bit of an experienced tart in the past!

Transferred just under £3k with a BT fee of £90 last thursday. In my previous tarting days, I have either been asked to pay the BT fee up front by debit card up or it has been automatically added to the balance at 0%.
Having read the small print associated with this particular offer in advance, I was aware of this sneaky new tactic.:mad:

:idea: No problem I thought - I'll settle the fee immediately with my debit card in the same phone call.

I rang to make the transfer and wasn't advised that the fee would accrue interest. So I asked about paying the fee with a debit card to avoid interest and the provider told me I had to wait a couple of days for the fee to be registered before I could do this, otherwise the whole payment could be allocated to the balance instead. I was also told the first minimum payment would be due on 1st July and, assuming I paid off the fee in advance, it woud be 2% of the balance so set up my minimum payment DD accordingly and entered the payment (approx £60) into my budgeting spreadsheet :cool:

Rang up today to pay off the £90 fee and was told
a) I have to pay more than £90 because some of the payment will be automatically allocated towards the balance - even though it is before the due date of the first required payment - but they couldn't tell me how much will be allocated :doh:
b) They couldn't tell me how much interest has been accrued on the £90 fee over the last 5 days :doh:
c) They also couldn't tell me how much I actually needed to pay today to ensure the full £90 plus interest is wiped off :doh:

I was also informed that if I didn;t get rid of the fee in advance, then the first minimum payment would actually be billed as outstanding fees and interest owing plus £10 - i.e. >£100 - a darn sight more than £60 I was told last week!

Finally - In order to get up to date information on the current status of my account and how today's payment will be allocated, I will have to wait for my statement which will be available at midnight on 7th june :wall: :wall:

If I decided to wait until the statement was available before making my advance payment - the provider will have charged 14 days interest at 14.9% APR on a £90 fee :mad:

So I made a payment today of £121 which I hope will cover the fee, the interest and whatever "proportion" will go towards the outstanding balance. I await my statement next week with interest ('scuse the pun :rotfl:)


Have I missed something here? How can us consumers manage our credit/spending accurately when even the card companies are unable to provide us with current day-to-day figures of our accounts?
Is charging interest on the BT fee a new tactic as this is the first time I have come across it?

Buyer beware!!!

sfax

Have they changed the Ts and Cs since Nov 2012? I don't think you'll get charged a penny unless they have. See my account trans below

21 Sep 2012: Account Opened
27 Sep 2012: £2100 BT
28 Sep 2012: £60.90 fee
8 Oct 2012: £1000 BT
9 Oct 2012: £29 fee
29 Oct 2012: £1600 BT
29 Oct 2012: £46.40 fees
9 Nov 2012: First DD payment of £150 (note this is 1.5 months after first fee paid)
13 Nov 2012: £1750 BT
14 Nov 2012: £50.75 fees

Total interest charged to date: £0

The_Boss

sfax wrote: »

Have they changed the Ts and Cs since Nov 2012? I don't think you'll get charged a penny unless they have. See my account trans below

21 Sep 2012: Account Opened
27 Sep 2012: £2100 BT
28 Sep 2012: £60.90 fee
8 Oct 2012: £1000 BT
9 Oct 2012: £29 fee
29 Oct 2012: £1600 BT
29 Oct 2012: £46.40 fees
9 Nov 2012: First DD payment of £150 (note this is 1.5 months after first fee paid)
13 Nov 2012: £1750 BT
14 Nov 2012: £50.75 fees

Total interest charged to date: £0

Similar with me and mine was opened in March. In fact, I thought it was a requirement for all lenders to clear the highest interest incurring debt first.

May just be dodgy advice given by the person the OP spoke to.

Wol2

Thanks both for your comments - I am relieved to learn that neither of you have been penalised with interest on the fee.

I too thought they had to clear high interest first so was concerned when they stated today that the £90 payment would be "apportioned" between the fee/interest and also paying off some of the balance.

The Boss: I think this is the same offer as you took up in march so I am now hoping that my statement will be interest-free despite the small print clearly stating that interest will be charged on the fee.

Fingers crossed it was dodgy advice - I just don;t want anyone to be stung by this who maybe doesn't have "room to manoeuvre" with their cash flow

Cheers friends
xxxx

thenudeone

For info. Natwest also charges interest on the BT fee.

The_Boss

thenudeone wrote: »

For info. Natwest also charges interest on the BT fee.

But not if paid off in one hit.

thenudeone

The_Boss wrote: »

But not if paid off in one hit.

Please explain

Jigga

I'd be interested in what the principle of the 'one hit'is too.

However, I am more familiar with the concept of the 0% BTfee that charges interest as experienced back in 2010 with RBS, noted here

sfax

It's simple. BT fee is 3%, typical minimum payment is 3%. Therefore the first minimum payment pays off the fee because payments have to pay off the part of the balance that yields the highest interest first. This is what potentially happened in my Tesco example above. You'd need to know how long you get interest free on the fee.

sfax

Jigga wrote: »

I'd be interested in what the principle of the 'one hit'is too.

However, I am more familiar with the concept of the 0% BTfee that charges interest as experienced back in 2010 with RBS, noted here

They can't do this anymore. The rules have changed and payments have to pay off the highest interest part of the balance first which would clear the fee (usually with the first payment)

The_Boss

thenudeone wrote: »

Please explain

Once the balance transfer was showing on my account, I paid off the equivalent of the balance transfer fee plus £5 and this therefore eliminated the part of the balance that attracts the highest interest, thus paying it off.