Interest on balance transfer fee query

stuzhunter

I balance transferred £4000 & incurred a £120 balance transfer fee. So my new balance is £4120. My credit card offers 12 months interest fee on balance transfer. Will I be paying intertest on the £120 over the next 12 months? Has anybody had this before?

thumshie

it depends on the card and how they apply payments..

Some cards apply payments to fee's first, so your first months payment often covers the fee part. Checks your T's&C's.

For instance (RBS/Natwest):

Allocation of PaymentsWe will apply payments we receive to your account in the following order:
1. Interest on special offers
2. Other interest, any fee and charges
3. Special offers
4. Purchases and balance transfers
5. Cash advances and money transfers
See section 2(D)(b) of your Credit Card Agreement for full details.

Edit: Noticed your BT fee was 3%, so my guess of RBS/natwest was wrong.. check your own T's&C's

stuzhunter

Thanks Thumsie, I will check the T&C. So If I pay my £120 for the first month repayment (together with my minimum repayment) then I would not incur any interest payment. Is that right?

ajaxgeezer

That's certainly the way it worked with my MBNA stooze. SBT £5600, fee of £112, total repayable £5712. First month's payment was £117 (fee in full + minimum payment of £5)

Like Thumshie says though, it all depends on what order they choose to use your payments, and this will be in the T&Cs.

tartmaster.simon

Anyone know how the Virgin credit card behaves? Is the BT fee cleared with the first month's repayment or 'buried' below the transferred balance?

As Virgin is actually MBNA, I'm guessing it behaves as described in the previous post.

I'm an existing customer of Virgin (had it for years). Anyone know if the 0% 13 month BT (2.98% fee) applies to existing customers? If so, I'm planning a large BT in a couple of months, as they've given me a whopper of a credit limit (over £10k), which is 2 or 3x what most cards give me.

Cheers,
Simon.

tartmaster.simon

From the Virgin web site:

"Remember though, the introductory balance transfer rate lasts for thirteen months from the date your account is opened (2.98% handling fee applies), not from when you transfer your balance."

B*gger! I guess I could cancel the existing card and immediately apply for another, but there's no guarantee I'll get such a good credit limit. Perhaps I'll try phoning them and see what they might be prepared to offer if I threaten to close the account.

Simon.

stuzhunter

stuzhunter wrote: »

I balance transferred £4000 & incurred a £120 balance transfer fee. So my new balance is £4120. My credit card offers 12 months interest fee on balance transfer. Will I be paying intertest on the £120 over the next 12 months? Has anybody had this before?

Quick update:

I did a balance transfer with HSBC. I got my first statement & I was asked to pay the balance transfee fee immediately.

I did a balance transfer with Halifax. My available credit limit was reduced by the balance transfee amount. My first statement just shows a reduced credit limit but no estimation of interest whatsoever. Does that mean I do not pay interest on the balance transfer fee?

YorkshireBoy

stuzhunter wrote: »

I did a balance transfer with Halifax. My available credit limit was reduced by the balance transfee amount. My first statement just shows a reduced credit limit but no estimation of interest whatsoever. Does that mean I do not pay interest on the balance transfer fee?

It would appear so. Check out condition 3.6(2) in your T&C's.