Virgin Money Credit Card - Sneaky Practice!

zagfles

onlyfoolsandparking said:

But not EVERY card, as I previously said Barclaycard allow you to have a balance on a promotional rate AND 'up to 56 days' interest free if you pay off purchases in full.  

Indeed but that's not the norm - I've got a Barclaycard that doesn't charge interest or a fee for foreign cash withdrawals (if the statement is paid is full) - that is very unusual. Although completely useless at the moment...

PixelPound

Mr87 said:

onlyfoolsandparking said:

But not EVERY card, as I previously said Barclaycard allow you to have a balance on a promotional rate AND 'up to 56 days' interest free if you pay off purchases in full.  

So I agree with this sentiment. There is divergence between providers on this, and it is confusing for consumers. I am not saying there is anything underhand (I have already said this), or that lenders are somehow responsible for consumer behaviour. But, that it is confusing enough that people make mistakes, such as OP, and others who are similarly unaware - and the financial penalty for getting it wrong is large.

@nic_c  On the key facts section is there usually anything about spending once you've done a balance transfer? I'm asking because I don't know. 

The full allocation of payments section on mine

We will allocate your payments in the following way:

> We will repay balances with the highest interest rates first, before repaying those with lower interest rates.

> Where we charge interest on multiple promotional balances at the same rate, we will pay off the balances in the order that the promotional rates expire (for example, a balance with a promotional rate that ends in two months' time will be paid off before one that ends in six months' time).

> Where promotional rates expire at the same time, we will pay off the balances in the following order: Money Transfers,

Balance Transfers, Card Purchases.

> We will always pay off existing balances that appear on your statement, before any new transactions that you have made, but are not yet shown on a statement.

Mr87

@nic_c nowhere in your example does it talk about the interest free period (although it's probably a different section), I just had a look at my Hfax CC statement:
Purchases: We do not charge interest on purchases made during your latest statement period if you pay off your full balance (including any balance transfers and money transfers) by the payment due date and you also paid your previous month's balance in full by the due date

So I suppose that's pretty clear. I don't think I'm advocating for anything in particular - it's just an observation that so many people seem to make or have made the same mistake in the past - you and I included. So what needs to change to reduce that? Maybe some sort of extra, explicit reminder on applying for / completing a BT?

zagfles

Mr87 said:

@nic_c nowhere in your example does it talk about the interest free period (although it's probably a different section), I just had a look at my Hfax CC statement:
Purchases: We do not charge interest on purchases made during your latest statement period if you pay off your full balance (including any balance transfers and money transfers) by the payment due date and you also paid your previous month's balance in full by the due date

So I suppose that's pretty clear. I don't think I'm advocating for anything in particular - it's just an observation that so many people seem to make or have made the same mistake in the past - you and I included. So what needs to change to reduce that? Maybe some sort of extra, explicit reminder on applying for / completing a BT?

You need to understand the reason credit cards offer 0% balance transfers. They're not charities, they'll be making a loss from the 0% balance transfer. They aim them at people likely to pay interest, either short term or long term, not people who avoid interest by paying off in full. So a "full payer" taking advantage of a BT is playing the system, which is fine, it's their system, but to do so you need to understand the system and the way it works.

Se1Lad

This is what it says on my virgin statement .. it’s pretty clear to me that if I had a promotional balance, but then made an additional purchase that I would be charged interest from the day the purchase appeared on my account:

How we charge interest 

We charge interest on all transactions and related fees, and on any unpaid interest, at the relevant rate for that type of transaction. The different transaction types are shown in the tables above. We charge interest on other charges and amounts added to your account, at the standard rate for CardPurchases. We will not charge interest on CardPurchases and related fees, as long as you pay then full balance shown on your statement by the payment date. Otherwise, we will charge interest each day on all transactions and related fees, on unpaid interest and on any other amounts, from the date they are added to your account until you pay them off infull. The total interest charge will increase the longer you delay making payments.

Mr87

gjpowen said:

[...] We will not charge interest on CardPurchases and related fees, as long as you pay then full balance shown on your statement by the payment date. Otherwise, we will charge interest each day on all transactions and related fees, on unpaid interest and on any other amounts, from the date they are added to your account until you pay them off infull. The total interest charge will increase the longer you delay making payments.

So this, to me , is less explicit than eg the Hfax one I posted above. The "full balance" could be interpreted as the balance pertaining to purchases, not BTs, which are not purchases.

@zagfles again, to reiterate, I'm not suggesting any malpractice / "sneakiness", I don't agree with OP on this regard. I understand the profit motive, therefore its entirely understandable banks do this.

It's slightly off point but is it right to suggest banks don't make profit on BTs? Most charge a fee. I suppose the best deals with long 0% BTs are probably loss leaders if the customer is a stoozer paying off the balance at t-1. But many aren't fee free and I'd suggest most people pay balances in instalments even at 0%. In addition, is there anything stopping a bank offering a CC that isn't interest free at all, and charges from day of purchase? Presumably they'd have to drop the interest rate to make it more attractive in some way...

Please take all this in the spirit in which it is intended - I'm playing devil's advocate to stimulate debate, given OP qn has been answered. 

PixelPound

Mr87 said:

@nic_c nowhere in your example does it talk about the interest free period (although it's probably a different section), I just had a look at my Hfax CC statement:
Purchases: We do not charge interest on purchases made during your latest statement period if you pay off your full balance (including any balance transfers and money transfers) by the payment due date and you also paid your previous month's balance in full by the due date

So I suppose that's pretty clear. I don't think I'm advocating for anything in particular - it's just an observation that so many people seem to make or have made the same mistake in the past - you and I included. So what needs to change to reduce that? Maybe some sort of extra, explicit reminder on applying for / completing a BT?

It's not supposed to! The question I was answering was that everything is in T&C which people don't read, so they put the details in a "Key Facts" section, which I quoted. Key Facts is obviously a summary it's not a Minutiae Facts section.

I have a sneaky feeling the OP is carrying some trailing interest (e.g. paid what spent that month not what was billed on statement)

Se1Lad

Mr87 said:

So this, to me , is less explicit than eg the Hfax one I posted above. The "full balance" could be interpreted as the balance pertaining to purchases, not BTs, which are not purchases.

@zagfles again, to reiterate, I'm not suggesting any malpractice / "sneakiness", I don't agree with OP on this regard. I understand the profit motive, therefore its entirely understandable banks do this.

I still think it’s clear enough as it says :  We will not charge interest on CardPurchases and related fees, as long as you pay the full balance shown on your statement by the payment date. 

So assuming I had a promotional deal running, I would not have paid off the full balance as shown on the statement, and would therefore be charged interest on any additional spend not covered by the promotion.

cymruchris

It's definitely not a sneaky practice - the thread title should be amended to 'Virgin money credit card - read your terms and conditions - otherwise you might get caught out'

Mr87

cymruchris said:

It's definitely not a sneaky practice - the thread title should be amended to 'Virgin money credit card - read your terms and conditions - otherwise you might get caught out'

Haha I feel like this is going round in circles! That's the thing, so many people DO get caught out. I definitely read my T&Cs (15 years ago when I got the card) but I got caught out a couple of years ago after doing a BT and spending. So I now know better. I think the assumption that people should automatically know about every eventuality after reading T&Cs is a faulty premise. And being financially penalised for making a mistake shouldn't be some form of rite of passage!

Edit: typo