Alliance and Leicester Reduced interest rate.

N_R

I have an Alliance and Leicester Cash Back Platinum Credit Card. I was contacted earlier this week by A&L. As I was a “valued customer” they offered me a preferential rate of 1.9 % interest rate until Christmas. I could only have this if I either made a balance transfer to their card, as I didn’t have any so she said that if I took a cash transfer into my current account for £50 (+£2 in charges) Then I would have the preferential rate till Christmas.

I’m not the brightest person when it comes to APR’s and the rest of it, but seemed to be a better rate than I was on, I immediately set up a payment to pay them their £50 back.

Is this a good deal? Anyone else had it?

Systemaddict_2

Need to know the amount you trf to your a/c in order to say if it was a good deal or not?

Systemaddict_2

Also, what interest rate is your bank paying you on your current a/c?

N_R

Sorry, I didn't ay in the origianl message it was a credit card. I have now ammended the original post. I knew in my head it was a CC!!

Milarky

N_R,
You seem to be saying that you did a notional balance transfer - for which you are charged a fee and that you then have the rate of 1.9% on further BALANCE TRANSFERS [but not purchases]?

There seem to be two kinds of 'existing customer' offers from MBNA [the issuers of your A&L card] at the moment:

1) where they say: "transfer a balance until such and such a date at such and such a rate"
2) where they say: "transfer a balance today at this rate"

The difference being that in the case of '1' you can transfer balances again and again during the special rate period - typically six months - while with the latter you can only get the rate for that couple of days, after which they apply a higher rate on further transfers [eg it was 1.9 for six months if done 'today' and then might later appear as: "2.9 on BTs made until December"]

What strikes me is that you can't have gained anything by dong a 'small' BT now, however, unless you had BT'd the full amount available [and hadnot used the card for purchases in the meantime] and then paid it back in full after 6 months in your savings account]. The principle of 'stoozing' as it is called is to keep as much of the bank's money for as long as possible at as high a deposit/or mortgage offest rate as possible.

In the case of A&L I think you would be charged a fee of up to £35 [at 2%] so anything over £1750 becomes 'fee free' - but only on a single transfer. As A&L/MBNA has shown, you don't need a 'balance' in order to undertake a balance transfer. The important questions all relate to the cost-effectiveness of doing so.

Good luck

N_R

After reading the latest post I decided to ring A&L and ask what it was I was offered and agreed to, as it turns out what I thought I was offered and what I got was two very different things. To the point where I have reported an incident of miss-selling.

Apparently the offer was for all new cash advances or balance transfers to have a rate of 1.9 % till Christmas.

The offer was made via an Indian call centre, and they apparently record all conversations. If I was told that they offered 1.9% on the current balance then they will honour it.

MarkyMarkD

It sounds exactly like they offered what you think they offered, on the second consideration. Nobody just phones and offers 1.9% on your existing balance for no reason IMHO! You paid the charges on the £50 transaction for no reason.

N_R

I was contacted yesterday by MBNA (the card operator for A&L) following my complaint regarding the marketing call from India. Apparently all the calls are recorded, and after listening to the conversation the lady said that it was obvious I didn’t understand the offer but did repeatedly ask if it covered the entire remaining balance. The Indian call centre failed to answer my questions thoroughly, and explain the offer in response to my confusion, and it was obvious it was all still unclear when I agreed to the cash advance at the end of the call. The Indian operator should have been able to address my concerns, as they are educated in the products, and don’t just read from a script.

This has resulted in MBNA putting the balance on my card at 1.9% APR. I’d have been happy with the £2 charge for the cash advance being refunded, but I’m not going to complain. New purchases will be on the normal commercial rate.


I do have one question though, with regard to having mixed APR’s on the account. I paid a deposit of £410 last night using the card. I will immediately pay this off, but will it pay £410 off the balance at 1.9% or the commercial rate? I suspect I know the answer. If I was in business I know what the answer would be.

YorkshireBoy

N_R wrote:

I do have one question though, with regard to having mixed APR’s on the account. I paid a deposit of £410 last night using the card. I will immediately pay this off, but will it pay £410 off the balance at 1.9% or the commercial rate? I suspect I know the answer. If I was in business I know what the answer would be.

Your summary box will list the order of payment application. But usually the payments go towards the lowest rate and special offers first. So yes, I would think your £410 will be applied to the 1.9% rate first.

This is a classic ploy with the CC companies, and just reminds us all that you should never make purchases on a BT card (which is what yours became when they gave you the special rate). One other thing, it's always best to take these offers when your card has a zero balance - as confirmed by a statement.

Reaper

N_R wrote:

I do have one question though, with regard to having mixed APR’s on the account. I paid a deposit of £410 last night using the card. I will immediately pay this off, but will it pay £410 off the balance at 1.9% or the commercial rate? I suspect I know the answer. If I was in business I know what the answer would be.

If only you had asked before doing it. This is the classic trap on credit cards. Any repayments you make are taken off the cheapest debt first. So that £410 will come off your money at 1.9% and you will be left with £410 on your card paying the full interest rate.

The way round this is to use a different card for purchases. Too late for your £410 though.

EDIT: Just beaten to it by Yorkshire Boy