Why am I having to make payments on a 0% balance transfer?

mc19801980

Hi, I am fairly credit card illiterate. I have transferred the balance of my credit card to another credit card, as an offer of 0% balance transfer was available for a 0% interest for 27 months. This is the first time I have done this and I made the transfer last month. This month, I have received a message that I have to pay x amount of money. I spoke to a customer service agent and I am none the wiser. I thought 0% interest meant I do not have to pay any interest until the offer tome expires. Can anyone help make this clearer please? Thank you.

Brie

There is no interest being added to your card balance. 

But the T&Cs always say you have to pay at least the minimum amount required by the card.  This might be as low as 2%.  So if you transferred £1k you likely had a fee to pay of 4% (or similar) so the total on your card the first month would be £1040.  And so you would be required to pay the minimum (say it's 2%) which might be about £21.  If you don't pay the minimum amount they withdraw the 0% offer and the interest charged will be very high (28%??)

For anyone getting a 0% balance transfer it's always a good idea to set up a direct debit to pay at least the minimum each month so as not to get caught out.  And also have a plan in place to pay off the remaining balance at the end of the offer period - for you that's the 27 months.

Does that help?

Brie

Oh and also do NOT use the card to purchase anything.  By this I mean the one with the 0% offer on it. 

This is another of the normal T&Cs where you will be charged the standard interest rate from the date of the purchase rather than getting about 50+ days interest free.

grumpy_codger

mc19801980 said:

Hi, I am fairly credit card illiterate. I have transferred the balance of my credit card to another credit card, as an offer of 0% balance transfer was available for a 0% interest for 27 months. This is the first time I have done this and I made the transfer last month. This month, I have received a message that I have to pay x amount of money. I spoke to a customer service agent and I am none the wiser. I thought 0% interest meant I do not have to pay any interest until the offer tome expires. Can anyone help make this clearer please? Thank you.

You already had a CC and have to know that you must make minimum payments. The fact that they don't charge interest doesn't change anything. 
The same applies to most (all?) other types of credit.

oldernonethewiser

This was asked by another poster recently so must be a not uncommon misunderstanding.

The CC company will issue a statement each month detailing the minimum that must be paid.  Obviously you can pay more than this should you wish but the crucial thing is that during the interest free period no interest is being charged to the outstanding amount.

mjm3346

Depending on the card if you miss/make a late payment the 0% offer may be removed

mc19801980

Brie said:

Oh and also do NOT use the card to purchase anything.  By this I mean the one with the 0% offer on it. 

This is another of the normal T&Cs where you will be charged the standard interest rate from the date of the purchase rather than getting about 50+ days interest free.

Thank you. That helps a lot and makes sense. Much appreciated. 

mc19801980

Thank you everyone. 

Nasqueron

oldernonethewiser said:

This was asked by another poster recently so must be a not uncommon misunderstanding.

The CC company will issue a statement each month detailing the minimum that must be paid.  Obviously you can pay more than this should you wish but the crucial thing is that during the interest free period no interest is being charged to the outstanding amount.

It might be simply because people don't read the terms of the offer - not even the long ones, but the key facts explains this