Balance Transfer Fees – Misinformed by customer service?

grumbler

:mad:
What is 2.25%? If it is monthly interest rate (£8000*2.25%=£180?), then APR is 30.6% :eek: - compare it with 6% that you have now. You cannot save anything with such transfer.

angelica

I assume that 2.25% is a minumum payment, as balance will be reducing, the payment will also reduce. But if it is monthly interest rate, then it is extremely expensive.

grumbler

angelica wrote:

I assume that 2.25% is a minumum payment, as balance will be reducing, the payment will also reduce. But if it is monthly interest rate, then it is extremely expensive.

Yes, I think Angelica is right. Some cards do have 2.25% minimum payment: Mint, A&L, Abbey, MBNA ... Neither of them offers low Life Of Balance interest rate, so APR is very likely to be much higher than 6%. Angelica is right: unlike fixed monthly payments with loan, minimum monthly payments with CC are calculated as % of current balance and will gradually get lower with time. However, dont get caught by this - you will end up paying much more total interest: Danger! Avoid Minimum Repayments.
Always compare APR, not monthly payments!

renagade

hi there guys

Thank you for such a quick response i think i am abit confused. i think the 2.25% is the minimum payment. How would i work out the apr. is there any tips top bring down my loan so it becomes cheaper ( balance transfer, credit card etc ).
Thanks
Renagade

grumbler

renagade wrote:

How would i work out the apr.

You cannot work it out. It must be advertised. If it is advertised as 'typical' you cannot be sure that you will be given this rate.

is there any tips top bring down my loan so it becomes cheaper ( balance transfer, credit card etc ).

6% is quite a good rate. The best loan rate now is about 5.5% - just a fraction lower than yours. Also your current provider can penalize you for early repayment - see your agreement.
There are a few credit cards that offer 4.9%-5.9% rate for the Life Of Balance on balance transfers (see http://www.stoozing.com/0fees.htm - bottom of the page), but it is not always easy to transfer a balance from a loan to a CC.
For general advice see:
Personal Loans: how to get the UK's cheapest
Cut Price Plastic Personal Loan
Cut the cost of existing loans?

YorkshireBoy

hilary1 wrote:

Four different people at A&L have told me that you get a 10% cash back on balance transfers which you get 12 months after your transfer. This is for new customers only they said.

The 10% cashback 'bonus' is on the 0.5%. ie 0.55%.

0.5% MoneyBack on all purchases – up to a limit of £15,000 annual spend

Extra 10% MoneyBack bonus on any MoneyBack earned in the first year

http://www.alliance-leicester.co.uk/currentaccounts/index.asp?page=moneyback-plus&ct=premierdirhome

philc_2

*I have posted this separately now, thanks.*

The woman in my local branch of Abbey has just said they definitely charge a BT fee, regardless of whether the application is made online or not - i.e. you can't have fee free BTs if you apply in the branch. Has anybody else experienced this? The only 0% BT card seems to be called simply a 'Balance Transfer Credit Card'.

sashacat

I have just taken out one of Alliance and Leicester's credit cards when I opened my new account there after reading Martin's top tips for current accounts. The deal on mine is 0.5% cash back on purchases and, at the end of the year a bonus of 10% of my 0.5%. This makes it about the same as my Morgan Stanley card

dmaclellan

I went to the Abbey to get a CC for a SBT and the woman told me a BTF would apply even though I applied in the branch. I even asked her to check after quoting Martin but the answer was still the same.

primera_man

primera man.i have just taken anamex ba card and done a balance transfer of £2850.
i've just rec'd my statement and it's the same as i was paying to lloyd's tsb on £5000!
i have been paying approx £90 per month and thought i'd be saving money by
transferring!now it looks like i'll be paying more!!