Interest on Balance Transfer fee

Curlyz

I have just been accepted for a Cap 1 0% BT 'til Jan 2007 card and transferred all my outstanding interest attracting balances to it - total of £2360. I was fully aware of the uncapped 2% BT fee but calculated that the cost - £47.20- would be a saving in comparison to what I would have paid leaving the balances where they were.

My question is will I have to pay interest on the £47.20 'til it is paid off. i.e. when I make the final payment as payments come of the interest free portion first?

I hope you get what I mean.

I have scoured the T&Cs but can't find anything relating to this.

Any ideas?

Jazzking

I am also curious about this since have just made a BT to TSB and instead of them increasing the amount transferred to include the fee, they have actually put the fee as a separate transaction. So presumably the BT is at the special rate, but we don't want to be paying 'normal' interest on the fee.

However, it shouldn't make a huge difference if your first payment covers the fee I as then it would wipe the fee and your subsequent payments would be targetted against the transferred balance at the introductory rate.

creditcardking_2

I have contacted Alliance and Leicester about this for my credit card and they do not charge interest on the fees during the 0% introductory interest period. Maybe Capital One is the same

charlie12

Curlyz wrote:

Any ideas?

It's unlikely you'll get charged interest on the fee. Best to call them to make sure.

This has come up many times, if you do a search I'm sure you'll get the answers you're looking for.

creditcardking_2

Capital One Bank

Allocation of your payments:
Unless you pay the outstanding balance in full, we will allocate your payments under this agreement in the following order:(a) any cash withdrawal handling fees
(b) any interest
(c) any other fees, charges and expenses
(d) any Payment Protection Insurance
(e) transferred balances (with the exception of those stated at (f) and (g) below)
(f) any transactions described in your statement as 'special balance transfers', 'special purchases' or 'special cash withdrawals'
(g) any other balances that are transferred after the end of the initial period (if any) referred to above under 'Interest Rate' if, at the time of the balance transfer, your agreement has a separate interest rate for the life of balances transferred within an initial period, and all purchases
(h) cash withdrawals.

YorkshireBoy

The 2 key areas in the T&C's are as follows:

"Interest Rate:
Interest is calculated at the applicable rate below, divided by 365 or 366, and multiplied by the total of the daily outstanding balances in the statement period. The applicable rate is (a) 0.00% p.a. for any statement period beginning within the first 3 months of your account, and then 14.00% p.a. variable, for purchases, (b) 0.00% p.a. until the day after your January 2007 monthly statement, and then 14.00% p.a. variable, for balance transfers and (c) 18.28% p.a. variable, for cash withdrawals.
Interest is calculated from the date of the transaction or incurring of a fee, charge or expense, until the outstanding balance has been paid in full.
Interest is applied to your account monthly on each statement date (or on a monthly date notified to you where no statement is issued - see section 9).

Allocation of your payments:
Unless you pay the outstanding balance in full, we will allocate your payments under this agreement in the following order:
(a) any cash withdrawal handling fees
(b) any interest
(c) any other fees, charges and expenses
(d) any Payment Protection Insurance
(e) transferred balances (with the exception of those stated at (f) and (g) below)
(f) any transactions described in your statement as 'special balance transfers', 'special purchases' or 'special cash withdrawals'
(g) any other balances that are transferred after the end of the initial period (if any) referred to above under 'Interest Rate' if, at the time of the balance transfer, your agreement has a separate interest rate for the life of balances transferred within an initial period, and all purchases
(h) cash withdrawals."

Now I read the above as your first month's (minimum) payment going towards your fee (c), and then the remainder going towards your balance transfer (e), (f), or (g). So that's around £47 to clear the fee (so it can't attract any interest over the length of the introductory period), and around £25 towards clearing the debt. [min payment = (£2,360+£47.20) x 3% = £72.22]

But don't take my word for it. If you need further clarification, I'd advise ringing them on...

General account enquiries 0800 952 5150 (24 hours a day), or

Application enquiries 0800 952 5452 (8.00am-9.00pm Mon-Fri & 9.00am - 5.30pm Weekends)

If you get a definative answer, please post it back as a new thread - because a lot of people have been asking the same question recently.

Curlyz

Thank you you've all been really helpful I will ring and let you know

Former_MSE_Dan

HI folks,


Just to quickly say, I saw this yesterday, gave Capital One Press Office a call, and they confirmed that the BT fee 'goes into the balance transfer pot, and as the first min payment is 3%, and the fee only 2%, it is essentially the first thing you pay off.

Hope this helps?