Credit Card Balance Transfer Discussion Area 3

johnllew

"I want to do a balance transfer". No need to say if the balance is positive or negative.

Asking for a balance transfer implies a debit balance.

From the Marbles T&Cs:

'Balance Transfer' means a transfer to the Account of a debit balance outstanding from you to another financial institution under an account with them;

From the Lloyds TSB Platinum T&Cs:

Balance Transfer: a transfer to us of a debt you owe to another lender.

From the Morgan Stanley T&Cs:

Balance Transfer means a payment which you ask us to make to someone else which will pay off or reduce the amount you owe them.

These are typical.

Galstonian

I can comment but please bear in mind I am not a lawyer and have no financial training, the position of moderator is both voluntary and unpaid.

I believe that whether there is a criminal or civil offence is actually not too important - the fact is that the card issuers can bring any agreement to an end and demand payment so why get on the wrong side of them?

Its a familar song - read the terms and conditions, understand them and stick to them. I have at times bent the truth but these are generally sins of omission or perhaps at times some slight exaggeration, I do not lie to lenders. I would not suggest that anyone else should either.

Smitty

I believe that whether there is a criminal or civil offence is actually not too important - the fact is that the card issuers can bring any agreement to an end and demand payment so why get on the wrong side of them?

None of us want to get on the wrong side of them, but it is cost effective to move a credit balance onto Egg before moving off to a c/a. However none of us want to break the law.

After following this discussion and good points being made on either side I have made my decision

smartsaver

Me too Smitty ::)

Galstonian

The methods I have used to build up balances over time are:

1) make regular transfers to cover spending on your 'regular spending' card. You don't have to have a card with interest free purchases, you just need to pay it off using balance transfers. Timing is something that takes a while to get right but I viewed the 1% cashback as a means to cover any slip ups. Unfortunately 0.5% doesn't offer so much of a margin for error but I'm a bit more experienced now.

2) if you ever get cheques always scour the terms and conditions. If they are treated as purchases simply write them to your limit made payable to yourself or to cover any major purchases.

3) I have also (inadvertently because of timing problems) transfered the same balance twice. The scenario: Card A carries a balance, apply for card B and ask them to transfer balance from card A. Card B drags their heels so much that an application for card C is made and a balance transfer to it processed before Card B finally gets their act together. Each time I applied for the balance to be transferred it existed, its only when they finally moved the money around that it didn't. I don't think this is a sustainable technique if it is actually the issuers of card A who are getting uppity about large credit balances.

4) I have also written cheques on my current account to put money in savings. The fact that it takes some time to go through is actually the reverse of the above - the balance doesn't exist when applied for but does by the time the transfer is done. You really need to get your timing right and if you do should only be paying interest for a couple of days.

5) not one I've used but for offset mortgages with an overdraft and/or credit card facility I understand it is possible to engineer a debt which can be transferred to a credit card by shifting your mortgage borrowing around.

I would urge people to avoid using the method of simply making up fictional amounts. If a card issuer requests documentary evidence of balances it is always in your interests to be able to provide them. While they may not have a legal right to demand proof I believe they have every right to say they will not offer the facility to transfer balances at a preferential rate without first seeing evidence that the debts exist. I'm surprised this isn't being done regularly now.

Reaper

From the Marbles T&Cs...
From the Lloyds TSB Platinum T&Cs...
From the Morgan Stanley T&Cs...

Right johnllew, I have a solution.

Read the Egg terms and conditions
I draw your attention the definition of a balance transfer:

"Transferred Balance means the amount you owe us on any sum you transferred to us under condition 2.4."

Section 2.4 says:

2.4 You can ask us at any time:

* to pay off an amount you, or your Additional Cardholder, owes to another UK lender and transfer it to the Account, as long as the amount transferred would not make you go over the Individual Limit and is £100 or more and is not used to discharge your or your Additional Cardholder's indebtedness to any part of the Egg plc group of companies;
* to transfer (by direct bank transfer) an amount from your Account directly to a specified current account held by you or an Additional Cardholder as long as the amount transferred would not make you go over the Individual Limit and is £100 or more.

So to summarise - you can create a debt on your Egg card by moving money to your bank account. No mention of whether you have an overdraft or not.

Now that you have created the debt you can use another credit card to do a balance transfer and take it over.

No terms and conditions of any card breached. Happy now?

johnllew

So to summarise - you can create a debt on your Egg card by moving money to your bank account. No mention of whether you have an overdraft or not.

Now that you have created the debt you can use another credit card to do a balance transfer and take it over.

Yes I know. Perhaps you would care to read my posts again? I have repeatedly said it is quite possible to create debt by SBTing from Egg to a current account. For example look here.

What I said was wrong was transferring a fictitious debt from one card to another - that is a different thing and is what most of us here have been talking about.

Smitty

Alright, Gal's got me thinking. Lets say I have an Egg card (out of the intro period with £0 balance) and card B who offers 0% interest on BTs for 6 months. Card B says balance transfers take 7-10 days.

If we do the following

Apply to card B to BT from Egg
10 days later
SBT from Egg to your c/a (If SBTs leave Egg immediately - I cant remember)
Your BT from card B may or may not have landed at Egg, but as they said it could take 10 days, you have made the provision for a debt to be there at that stage.

Reaper

I applogise if I got the wrong end of the stick. I guess I didn't read back far enough in the previous (huge!) thread.

It seems to me the arguement is over trivialities. Everybody seems to accept stoozing can be done legally, depending on the mechanism.

Given that, even if you do technically break their T&C there is no way a credit card company is going to bother giving somebody a hard time when a mechanism exists to do it legally. Besides the credit card companies know full well what is going on.

Take the short cut or do it the correct way, whichever makes you feel the most comfortable.

Galstonian

I'm afraid I will have to put my moderator hat on and say that if there is any kind of official stance to be taken by this site it is that the terms and conditions are to be adhered to and cannot be dismissed simply because you don't like them or don't feel like abiding by them.

What you actually do is of course up to you but this site will only promote taking advantage of loopholes or bending rules, it cannot condone breaking them.