Warning - Virgin 15mths 0% will charge interest on BT fee

jdavtz

Just read the weekly email and was about to apply for the Virgin/MBNA card for 15 months 0% balance transfer with 2.98% fee, but phoned up to check a detail, and, yes, they will take your monthly payments from the lowest-interest item (the balance transfer) while the BT fee sits there being charged interest (at 15.9%) until you have cleared the balance - so for a BT of say £10k, that's around £50/year roughly-ish in interest that you'll be paying on top of the BT fee.

Hope that info's of use to someone.

Jonathan.

YorkshireBoy

jdavtz wrote: »

...phoned up to check a detail, and, yes, they will take your monthly payments from the lowest-interest item (the balance transfer) while the BT fee sits there being charged interest (at 15.9%) until you have cleared the balance...

I suggest you get your information from the T&C's/summary box, rather than over the phone where 'misunderstandings' can occur.

Hope that info's of use to someone.

Not really, since it's incorrect!

The Virgin minimum payment is either 3% of the balance, or the 2.98% BT fee + £5 whichever is least, provided that it will always be at least £25 (unless you owe less than £25 of course).

So, bearing in mind that a 2.98% BT fee + £5 will always be less than 3% of your balance (which includes the BT'd amount and the BT fee), your first minimum payment will be the BT fee of 2.98% + £5, or in other words you clear the BT fee with your first payment.

Subsequent payments will be £25.

From the T&C's...

2d We will charge interest on handling fees, and on interest you already owe, at the rate which applies to the relevant transaction.

That'll be 0% then!

colinw

Cheers for that YorshireBoy. I was just about to post asking how the BT fee is paid. if you are taking the route of paying direct into your current account do you just use the credit card cheques? or can you bt direct into your current account? Not a bad deal really if you shove it in an account with a reasonable interest rate. :beer:

YorkshireBoy

colinw wrote: »

Cheers for that YorshireBoy. I was just about to post asking how the BT fee is paid. if you are taking the route of paying direct into your current account do you just use the credit card cheques? or can you bt direct into your current account? Not a bad deal really if you shove it in an account with a reasonable interest rate. :beer:

Hi Colin,

Yes, you can transfer it straight to your current account. I always do my transfers by phone. That way you can confirm it's at 0%, because one of these days it won't be (when they finally, having had the definition in their T&C's for some time now, change the description to 'money transfer').

Good luck.

iiisjw

HiAre you sure that 2.98% + £5 will always be less than 3% of balance. To my calculations a balance of greater than £25000 would be required for this to be the case.

colinw

I have a transfer of £6600 to my current account. My calculations are

2.98% of fee + £5 = £196.69 + £5 = £201.68

3% of outstanding balance which is 3% of (£6600 + £196.69) = £203.90

Therefore I pay the 2.98% BT Fee + £5 which is the lower fee

YorkshireBoy

The 'crossover' occurs below (roughly) £4,500 where 3% is less than 2.98% + £5.

Anything over (roughly) £4,500, and 2.98% + £5 is always less than 3%.