Logic / Fees check please (LOB BT)

wolseley_2

In the post today I received a set of credit card cheques from Halifax offering 5.94% p.a. for the life of the balance (as well as the normal 3% handling fee).

I currently have just over £4,000 on this card at the standard rate (12.94%)and as per the terms of the card, promotional (lower) balances get paid of first. I have until 2nd September to use these cheques at the promotional rate, so plenty of time to move the £4,000 somewhere else giving a nice empty card on which everything will be at 5.94%.

I currently have an Egg card (normal one) with a zero balance, so my thinking is to transfer the entire balance off of the Halifax card (onto the Egg card), then pay one of the cheques into my current account and use this to pay off the Egg card. This way I should be able to move the entire existing balance onto the low rate LOB offer, possibly plus some other small things (would be nice to get more of my non-LOB debts into one place).

Could you kindly folk just check some of my logic for me....

I have trawled the Egg website and not found any mention of a balance transfer fee for non-promotional balance transfers. Am I right in thinking that there is no BT fee with Egg for normal BTs?

Once I have transfered the debt from the Halifax card to the Egg card, how long should I leave it before using the promotional cheques to ensure that I don't accidentally have some kind of crossover problem such as interest from the shifted balance being added onto the Halifax card and charged at the normal rate?

Am I correct in assuming that I can just write the CC cheques out to myself and pay them into my current account and still get the promotional rate? (The letter does say that they can be used to pay for things like a holiday or home improvements, so I assume that this is OK to do).

Is there anything else I have missed?

Thanks.

YorkshireBoy

wolseley wrote: »

Am I right in thinking that there is no BT fee with Egg for normal BTs?

Yes. From the FAQ...

http://new.egg.com/visitor/0,2388,3_11084--View_1765-bID_ECBalTraFAQ-dva_1,00.html#isthereafeeforbalancetransfers?

We do not charge a balance transfer fee on balance transfers made at your standard variable rate.

Once I have transfered the debt from the Halifax card to the Egg card, how long should I leave it before using the promotional cheques to ensure that I don't accidentally have some kind of crossover problem such as interest from the shifted balance being added onto the Halifax card and charged at the normal rate?

Until the credit transaction loses its 'pending' status (as shown in your online secure area). Also, I'd overpay slightly to stop the interest.

Am I correct in assuming that I can just write the CC cheques out to myself and pay them into my current account and still get the promotional rate? (The letter does say that they can be used to pay for things like a holiday or home improvements, so I assume that this is OK to do).

Yes, stoozers use this method. However, if you're worried you could make the cheque out to a trusted relative (with a different surname).

Is there anything else I have missed?

Check you're not in your anniversary month before actioning the BT to Egg. I'd suggest a secure message rather than a phone call.

Egg sometimes run special promotions on your account, and sometimes they don't tell you! Check beforehand that there isn't, for example, a 3.9% 6 month offer running which has a 3% BT fee. Again, I'd suggest a secure message is the best method.

Good luck.

wolseley_2

One other thought that I have just had... When Halifax apply the 3% fee, this is going to be at a higher interest rate than the BT, so will be paid off last. Does anyone know whether the fee is applied to the account before or after the BT? I was thinking that if the fee is applied first, then if I put the card into credit by the fee amount then it will pay off the fee before the BT is applied. Anyone know?

Milarky

Check you're not in your anniversary month before actioning the BT to Egg. I'd suggest a secure message rather than a phone call.

As they may not charge a fee on a 'standard' rate balance transfer there is nothing to stop you asking for this in lieu of any 'special' rate plus fee. The 'special' is only a variation of your terms and conditions after all - so I can't see how anyone can be 'forced' to take transfer with a fee - but in that case you'd need to specify in advance to Egg that's what you want to do.

wolseley wrote: »

When Halifax apply the 3% fee, this is going to be at a higher interest rate than the BT, so will be paid off last. Does anyone know whether the fee is applied to the account before or after the BT? I was thinking that if the fee is applied first, then if I put the card into credit by the fee amount then it will pay off the fee before the BT is applied. Anyone know?

Halifax say something like: "If you put a credit balance on this card we will repay it to where it came from [usually with reference to balance transfers]" so this may fall foul of that. Besides that, Halifax simply applies the fee at the same time as the balance transfer (probably after) so you can't expect to, say, have you card in £100 credit then borrow £3000 from them (£3090 inc fee - but balance of £2990 DR) and expect for the fee not to appear as a debit item - i.e. you can't pre-pay a 'fee'. Although there is no reason in principle why any 'fee' cannot be funded separately from a loan on which is is raised the fact that a sum of money is then borrowed - far in excess of the fee item - makes a fiction of the fact that the fee is prepaid. So I would guess that banks are on firm ground when then charge to your account fees and other items,