WARNING: Looks like my ignorance has cost me

richard_3095

Hi. In May I did a balance transfer with Santander.  Up to that transfer, all my transfers that ever arranged gave a period of zero interest for a stated period, and I've paid a transfer fee.  I had a reason to query the interest I was being charged this time with Santander and the operative at Santander said that in the case the 50+ pounds I had paid as a transfer fee was simply for the privaledge of paying off the other credit card and that I am also paying interest on that transfer. I was gobsmacked. Thing is,  I thought that the transfer fee was effectively a loan interest item. After all, previously I'd had money effectively lent for a period where no interest on it was paid. So, the transfer fee then is not a form of interest according to the Santander operator but simply for the privaledge of paying off the other credir card.  My erronious understanding has apparantly cost me dear. I'm now looking to ,change banks. NB: We never actually got into my account on the day, for some technical reason to see the transfer deal.

MorningcoffeeIV

That's correct. The fee is just that - a fee.

The rate that applies to the balance is a separate matter.

cymruchris

What was the actual transfer deal you signed up for? Your post isn't clear. 

You say that previous transfers were for 0 percent for a stated period with a fee - what was this latest one?

Most (not all) transfers whether balance or money have fees these days.

Clarify what it was that you actually signed up for - as you say you've been charged interest. 

Have you used the card to buy things since the transfer?

Ebe_Scrooge

I'm not sure I fully understand.  Usually, you are given the option of paying the fee upfront, or of adding it to the amount transferred.  If you add it to the transferred amount, it usually forms part of the overall transfer balance at 0% (or whatever rate you were offered).

However, it would be possible for the fee to be accounted for separately, and you'd pay interest on that portion of the overall balance.  If that's the case, then just pay it off, along with any accrued interest (which I can't believe will be much), then the rest of the balance will continue at the promotional rate.

What do the T&Cs that you signed up for state, in terms of how the fee would be processed?

richard_3095

When I was in Santander's branch I never got to see what I'd sign up to. The system did not process my card.  But should I not be able to see this information when I go into my internet banking?  I've not bought anything on the card since the transfer. I had a balance of about £700 before I made the transfer and I thought the interest that started to be charged was being charged on that only (I'd assumed that interest was being charged on that £700 because any period of no interest had probably expired). So, apparantly since the transfer (I did a transfer of about £1700) interest may have been charged on the whole balance. I had no interest charged before the balance transfer.  Have I a right to ask Santander how they calculated the interst charged?

[Deleted User]

If you have a balance of £700 on a card that is interest bearing, you should be charged the interest as normal, the BT 0% offer should be separate and not charged interest. If you were charged interest on the whole balance of £700+BT then either they made a mistake or you have somehow lost the 0% deal which is typically done by not paying the minimum on the card.

Probably better to ask Santander 

Ebe_Scrooge

richard_3095 said:

When I was in Santander's branch I never got to see what I'd sign up to.

You signed up for a financial product without even looking at the T&C's or understanding what you were signing up for???

richard_3095 said:

I had a balance of about £700 before I made the transfer and I thought the interest that started to be charged was being charged on that only (I'd assumed that interest was being charged on that £700 because any period of no interest had probably expired).

This may be the explanation - or at least part of it.  If you mix spending and balance transfers on the same card, it can get very messy.

Yes, you need to read the T&Cs carefully - they're available online, or you can ask Santander directly.

It depends on exactly what card and what balance transfer deal you've got, but I found this on their website(https://www.santander.co.uk/personal/support/credit-cards/balance-transfers-for-existing-customers)

"If you also use your card for purchases during the 0% balance transfer period, you’ll be charged interest on those purchases. It’s important to clear the balance in full (including the balance transfer) before your next statement to avoid these interest charges."

Now, this may or may not be applicable to your individual circumstances - apart from anything else, we don't know exactly which product you took out.  But it does give an indication of how mixing up purchases and transfers can get very confusing.

Read the T&Cs for your particular product carefully, that should give you the answers, but if you're still unsure then yes, give Santander a call.  They will be able to guide you through the interest calculations.

richard_3095

Hi. I've managed to download all my credit card statements right back to January this year. These statements should bring to light what the deal is with fees and interest rates.  I will get back to this thread after I have examined the statements and tell what I've found and perhaps that might enable folks to offer more insightful assistance armed with a greater knowledge of the case.. Thanks. Rich

Ebe_Scrooge

richard_3095 said:

Hi. I've managed to download all my credit card statements right back to January this year. These statements should bring to light what the deal is with fees and interest rates.  I will get back to this thread after I have examined the statements and tell what I've found and perhaps that might enable folks to offer more insightful assistance armed with a greater knowledge of the case.. Thanks. Rich

Thank you for taking the time to do this - apart from anything else, hearing the resolution to a query can be very helpful for other folk who have similar issues and who stumble across a relevant thread

The statements will likely help to a certain extent, but it's also worth taking a look online at the T&Cs that pertain to your particular product(s).  They're all freely available - you just need to make sure you're looking at the right product, as most banks offer dozens of different cards, balance transfers, special deals, etc.

richard_3095

The interest charged is on whatever the balance is at the end of the statement period. On the May statement there are two Balance Interest Statements, one for £395.07 - 0% "to 31.12.22", and one for £331.89 - 0% "to 30.11.22".  That's no interest on a balance of £725.96. In June, after I have made  a new balance transfer the closing balance is £2406.64 and I've been charged interest on this at 1.456% which is £24.38. OK, but should the interest be on £2406.74 minus the £725.96?  Because this closing balance is the balance transfer figure plus £725.96.