Balance Transfer Question

RG2015
RG2015 Posts: 5,900 Forumite
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in Credit cards
The Virgin Money website states the following in relation to their 0% balance transfer credit card;

"Once approved, we’ll send the funds (up to 95% of your credit limit) to your other card provider the next business day, if we receive your instruction before 4pm."

This relates to a transfer requested at the application stage. Would I be correct to assume that if I apply after receiving the card that I can transfer up to my full credit limit?
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Comments

  • bengal-stripe
    bengal-stripe Posts: 3,349 Forumite
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    RG2015 wrote: »
    Would I be correct to assume that if I apply after receiving the card that I can transfer up to my full credit limit?

    Regardless at what stage you ask for a transfer, you only can transfer a maximum of 95% of your available limit.

    There is a transfer charge of typically 3% to be paid. If you were to transfer all your available limit, the moment that charge hits your account, you would be exceeding your limit.
  • RG2015
    RG2015 Posts: 5,900 Forumite
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    bengal-stripe wrote: »
    Regardless at what stage you ask for a transfer, you only can transfer a maximum of 95% of your available limit.

    There is a transfer charge of typically 3% to be paid. If you were to transfer all your available limit, the moment that charge hits your account, you would be exceeding your limit.

    Thanks for your reply but there is no balance transfer fee payable for 60 days on this particular card so this answer does not apply in my case. I am still confused as to why I can only utilise 95% of my credit limit.
  • Ben8282
    Ben8282 Posts: 4,821 Forumite
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    RG2015 wrote: »
    Would I be correct to assume that if I apply after receiving the card that I can transfer up to my full credit limit?
    NO
    RG2015 wrote: »
    Thanks for your reply but there is no balance transfer fee payable for 60 days on this particular card so this answer does not apply in my case. I am still confused as to why I can only utilise 95% of my credit limit.
    Because that's the way it is. Don't be greedy. 95% is enough.
  • RG2015
    RG2015 Posts: 5,900 Forumite
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    Ben8282 wrote: »
    NO

    Because that's the way it is. Don't be greedy. 95% is enough.

    Now I really am confused. Why on earth give you a credit limit when it actually isn't your real credit limit.

    If I was told my salary was £30,000 and they only gave me £28,500 without any reason it is hardly being greedy to ask why.
  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
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    It's to allow for fees. You may not be paying a fee in this instance, but systems are set up to cater for all scenarios.
  • RG2015
    RG2015 Posts: 5,900 Forumite
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    Thank you zx81. This does have some logic but a £300 allowance for fees is a bit excessive.

    Interestingly, my Nationwide credit card balance transfer page in online banking says I can transfer my current available balance. This would take me up to my full credit limit.
  • RG2015
    RG2015 Posts: 5,900 Forumite
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    Nationwide also put the onus on me with the following statement on my online banking balance transfer page.

    "The maximum amount quoted above does not include any fees which may apply. You'll need to take into consideration the balance transfer fee when transferring a balance, so as not to go over your agreed credit limit. The fee will apply to each balance transfer you make."
  • tempus_fugit
    tempus_fugit Posts: 1,189 Forumite
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    And many probably don't read that caveat or do not fully understand the implications, so most card providers build it in with the 95% limit. It's different ways of doing it but clearly (from what I have read on these boards) having a built-in buffer is necessary for a large proportion of customers.
    Retired at age 56 after having "light bulb moment" due to reading MSE and its forums. Have been converted to the "budget to zero" concept and use YNAB for all monthly budgeting and long term goals.
  • RG2015
    RG2015 Posts: 5,900 Forumite
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    tempus_fugit wrote: »
    And many probably don't read that caveat or do not fully understand the implications, so most card providers build it in with the 95% limit. It's different ways of doing it but clearly (from what I have read on these boards) having a built-in buffer is necessary for a large proportion of customers.

    The more I think about this the more ludicrous it sounds. The credit limit is an arbitrary figure decided by the bank, say £10,000. They then say you can only use 95%, ie £9,500.

    Why don't they just give you a credit limit of £9,500 and forget this confusing 95% nonsense.
  • eskbanker
    eskbanker Posts: 30,883 Forumite
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    RG2015 wrote: »
    The more I think about this the more ludicrous it sounds. The credit limit is an arbitrary figure decided by the bank, say £10,000. They then say you can only use 95%, ie £9,500.

    Why don't they just give you a credit limit of £9,500 and forget this confusing 95% nonsense.
    They don't say you can only use 95%, they say that's the maximum for balance transfers. You could spend the other 5% on purchases if you chose to, so the full credit limit is available to you....
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