Warning re trying to beat the bank with balance transfers

thebaron_3

Not sure if this has been brought up before on another thread, but I thought I'd warn other consumers about certain "offers" on balance transfers.

I opened up a new Abbey credit card, and being an existing customer benefitted from a 2.5% fee on transfers which attracted 0% for 12 months.

I transferred a good £3k from other cards (Christmas spending etc!) and stashed the money I would have used to pay the bill in a decent savings account.

However, Abbey then proceeded to offer a good cashback rate on supermarket spend. Too good to resist! And 0% on purchases for 3 months!

When my 3 months were up I paid the value of my purchases, but was puzzled to see that I had been charged interest on my next statement. Upon reading the v. small print, I discovered that Abbey allocated any payments I made against my balance transfer before any purchases. Therefore I had effectively checkmated myself in trying to benefit from the 0% balance transfer as any payments I made to clear the now interest-accruing purchases were simply eroding my interest free balance! Needless to say I sacked it off and paid up the entire balance and will not be using the card again once the supermarket cashback offer ends.

I think the morale of the story is that if you're trying to beat the bank with a balance transfer, don't be sucked in by the tempting offer on short-term interest free purchases!

YorkshireBoy

thebaron wrote: »

Needless to say I sacked it off and paid up the entire balance...

Depending on the value of your purchases, it may have been better to swallow the interest hit and let the BT run it's course.

Upon reading the v. small print

It's not "v. small" in the summary box, for those who don't read T&C's: http://www.abbey.com/csgs/Satellite?c=GSDetalleProducto&cid=1157698188950&idParent=1157698106817&pagename=Abbey%2FGSDetalleProducto%2FGS_DetProducto

bubbit

I am really new to this and thought I had posted a question last night but I am so green I can't even find the question!! My question is, is it possible to transfer a bank loan (Currently at £11.000) on to a credit card with 0% interest?

Money_Man

Classic trick by card issuers to generate higher profits, retail spends locked in on a higher APR!

Bismarck

A good warning to all....sometimes the offers I get make me chuckle...you do a set of LOB transfers on to a card with high limit which you stick in the drawer.....then along comes the cashback offer...."oooh..should I, shouldn't I?" so you have a laugh and get all pleased with yourself that you won't fall for it...THEN they send you a better life of balance transfer offer....which trumps your previous deals and you go"why didn't you say that in the first place?" so you have to undo everything to re-shift the same debt back! I look forward to each day's post with interest as you never know what brilliant idea they'll come up with next....!

NickX

The only time when it is advisable to spend on a Balance Transfer card is when the promotion end dates are the same on both Purchases and Balance Transfers.

This is one the Banks favourite tricks to catch the customers out, they blatantly try to twist your arm to get you to spend on the Balance Transfer card, and allocate the payments in such a way that you are forced to pay interest. Very sneaky.