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Balance Transfer Fees – Misinformed by customer service?

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  • carpy
    carpy Posts: 1,089 Forumite
    Part of the Furniture 500 Posts Name Dropper
    i have performed 2 separate SBT with Virgin since opening my account in late July/early August and haven't been charged a fee, even though it tells you on the website you will be????

    i'm not complaining though!!!

    i'm just wondering if i can do any further SBT at the promo rate without paying a fee?
  • It's a non-starter I'm afraid.

    You can pay £3K off your mortgage and your monthly payment will reduce (by how much I don't know - have you asked?). However, it's going to cost you around £90 a month to service a £3K CC debt making minimum 3% payments or £60 a month making 2% minimum payments.

    You could apply for an MBNA (or MBNA branded) card which allows £5 minimum payments but this will only cover you for 9 (possibly 18) months of your 3 years. You could then pay the extra £55/85 each month off your mortgage. At the end of this 9 month term, you will need to find another provider to take on the £2,955 remaining debt - which is risky for you if your income is reducing and your outgoings are increasing as you have stated.

    Some other thoughts...

    * 0% deals might not be around at the end of this year, let alone in 3 years time.
    * BT fees (2% max £50 on most) could/would/will be payable everytime you switch - possibly 4 to 6 switches needed.
    * If your income has reduced and (by your own admission) your outgoings have increased, you might not pass lenders credit checks.
    * Any problems in getting new/adequate 0% deals over the next 3 years may see you on 15.9% interest if you can't get a loan at say "typical" 7.9%. Either way you'll pay more than your 6.14% mortgage rate.

    Thanks for your detailed reply. I was thinking of paying more than the minimum amount off the card. In principle it sounded simple but the way you put it......!!
    Thanks anyway.
  • pacajam
    pacajam Posts: 19 Forumite
    Hi,

    I've been a lurker here for a while but have finally registered!

    I got the paperwork through for a Virgin Credit Card today and I'm trying to get my head around the BT fees. Excuse the lenght of this post but I'm thinking it through as I'm typing.

    If I transfer £5k I'll have a handling fee of £50 (the max charge).
    My balance will then be £5, 050.

    At the end of the first month I'll have £5k at 0% but (according to the T&Cs) I'll get charged interest (at 1.2408% monthly) on the handling fee which I make to be £0.62.

    My balance will be £5,050.62 and I'll then pay the min (2.5%) which is £126.27. This will pay off the cheapest f(so 0% balance first) leaving my balance at £4,924.35 (£4,873.73 at 0% and £50.62 that I'm paying interest on).

    Is this broadly how its going to work? - so after the 9 month free period I'll have paid off 2.5% a month of the initial balance but now owe £55 ish from the handling fee?

    I think this is still a good deal for me at the moment but I want to work all this out before I do it. I had a look for postings on this topic but couldn't find any - but if there is any existing info you can point me to it is much appreciated.

    Ta.
  • YorkshireBoy
    YorkshireBoy Posts: 31,541 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    pacajam - how it works is this...

    You get whatever credit limit they give you so your £5K BT is under 95% of your limit (the max BT allowed).

    You BT another cards £5K debt to the Virgin card.

    Virgin charge (not add) £50 for the BT fee.

    Your payments to Virgin are £5 + fees + insurance + interest *NOT 2.25% AS MOST CC NEWCOMERS THINK*. Check in the summary box and look under minimum repayments for the word "LESSER".

    If you don't want insurance, your minimums payment to Virgin are £55 in month 1, followed by £5 in months 2-9.

    Total paid over 9 months is £55 + (8 x £5) = £95 (inc. £50 BT fee)

    Balance to transfer at end of deal to new card is £4,955

    OK?

    Read my post, then read it again, and then check it off against the summary box that Virgin sent you. Any more problems post back.

    Virgin summary box...

    http://uk.virginmoney.com/credit-card-v1/carda/pre-apply.html
  • pacajam
    pacajam Posts: 19 Forumite
    Thanks for the detailed reply YorkshireBoy.

    I understand what you are saying about them charging, rather than adding the £50, but that is not clear from the T&Cs -

    Interest charging information
    Card purchases, balance transfers, credit card cheques and cash transactions: we will charge interest on all transactions, fees, other charges and interest, starting on the transaction date and ending on the date you pay the bill in full. We work out interest each day so the earlier you make payment, the less interest you will have to pay.

    How your balance is paid off
    Items at lower rates of interest on your statement will be paid before items at higher rates of interest.


    on which I based my calculations.

    The min payment section is interesting on re-reading. I must admit I read "greater" when it says "lesser". I currently get billed for min payments of 3% of balance on an M&S Card and 2% of balance on an IF card, is the £5 thing just a Virgin/MBNA thing? I'm off to dig out the terms for the other cards.

    One thing I didn't mention is that I'm wanting to do a SBT to clear my overdraft here - I wonder if this affects any of my calculations.

    Thanks again for your reply.
  • YorkshireBoy
    YorkshireBoy Posts: 31,541 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    pacajam wrote:
    I understand what you are saying about them charging, rather than adding the £50, but that is not clear from the T&Cs -
    here's the bit you want (from the summary box)...

    Monthly minimum payment
    The lesser of:
    * 2.25% of your balance (min. £5) or
    * charges for Payment Protection Cover plus interest and fees, plus £5 or
    * your balance, if it's under £5.
    pacajam wrote:
    ...is the £5 thing just a Virgin/MBNA thing?
    Got it in one! ;)
    pacajam wrote:
    One thing I didn't mention is that I'm wanting to do a SBT to clear my overdraft here - I wonder if this affects any of my calculations.
    The principle's the same, so it shouldn't do. However, do check with Virgin that you can still do SBT's as the T&C's are a little confusing at the moment. We were having a discussion over on the stoozing website earlier today about a possible loophole for SBT's if they do stop them.

    Good luck.
  • Following my notice earlier that there appeared to be a BT Charge I now have a letter from the Virgin Head of Customer Satisfaction! stating that the 2% charge has been introduced to cover the cost of "handling and processing a balance transfer". I'm confused.
  • JCL
    JCL Posts: 574 Forumite
    Debt-free and Proud!
    Sorry if this has been cover elsewhere but I'm looking to do a balance transfer. Checked Martin's article and the table states that Alliance & Leicester and Lloyds TSB Platinum card don't charge a balance transfer fee.

    However, I've been on both sites and they state the following:

    Alliance & Leicester
    We may charge a handling fee for each balance transfer of 2% of the amount transferred


    Suppose may is the key word there.

    Lloyds TSB Platinum
    Charges 9.1 - We charge 2% of the amount of each Balance Transfer...


    Can anyone clear this up? If you phone them do they waive the fee or something?

    If the goalposts have moved could Martin update his article?

    Thanks in advance for any help.
    MFW 2015 #41 = £20,515/£20,515
    MFW 2014 #41 = £26,100/£25,000
    MFW 2013 #41 = £10,000/£10,000
    Original MF date = May 2036 - MF achieved on 15 June 2015
  • JCL wrote:
    Can anyone clear this up? If you phone them do they waive the fee or something?
    A&L say they "may" charge 2% (max. £35). Unfortunately, as the T&C's governing your contract with them will be the ones on the back of your credit agreement, you won't find out if they "will" until you apply.

    LTSB BT's are fee-free only if done within 6 weeks of opening the account, and they "will" charge afterwards. (NB: 0% is only offered in the first 6 weeks as well. Any BT's made after 6 weeks will attract standard interest rates and a 2% uncapped BT fee).

    On balance, if the absence of a fee is crucial to you, of the two you've considered, I'd apply for the LTSB card.
  • FTD
    FTD Posts: 137 Forumite
    I posted on here not too long ago about the interest rate on balance transfer fees are charged at the cards standard rate, and not, as we would believe, at the promotional rate for the bal transfer.. . . stick with me!...

    I've queried this now with LloydsTSB platinum card services about 3 or 4 times, and have on each occasion been told it is outlined in the terms & conditions.

    I have now received a copy of my 'alleged' signed agreement and the terms and conditions, I, nor friends can see where it explains that the fee charged for balance transfers is charged at the standard rate. IT SIMPLY IS NOT THERE in black and white!!!!

    However,
    The copy of my signed credit agreement only shows a partial address and incorrect postcode.

    It shows my house number and street, and part of the town name where I live, and the first half of the postcode is completely incorrect. All these details are not in my handwriting. The county is missing so the town could be anyone of a number in the UK.
    It shows my current account sort code and account number, and down at the bottom, something that resembles my signature, but doesn't look right, and also date not in my handwriting.

    How can I be sure that this is my credit agreement? Would it stand up in court if I disputed the debt? It was brought to light on this forum the consequences of unsigned or incorrect agreements that Catalogue companies had problems with. Maybe This form was filled out for me by someone at the bank one day when I went in for a loan or overdraft, now what if I honestly could not remember!!!

    I would never have known what was on my agreement had I not queried the interest rate on the charges.

    what do you reckon? (hypothetically)

    Cheers

    FTD
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