I have a branded MBNA card and according to the material I have, it states the 0% promotional rate would end on my July 2008 statement. I took the card out last year and transferred some balances.

Well, the July statement is in, and my interest charged is the same as last couple of months (around £57 on an £8,500 balance - I made some purchases on top of the balance transfer).

My question is, is have they cocked up or will the interest kick in next month? The interest they are applying does not seem right at all..

Perhaps they meant the 0% would finish from the July statement onwards ie from the date it was printed. That way the interest is now accruing and you will likely see a higher interest charge on the August statement.

It would be easier if card companies just gave a specific date in the literature but they tend to use the statement dates as deadlines.

It depends on how the provider sets their Balance Transfer end dates. Some set them to the exact date i.e. 6 months from the date you took it and will charge interest from this point. Others set it from the next statement period after the BT ends so you will probably find interest in your next statement period.

It's possibly the purchases, they might not be 0%, they catch people out like this.

0% cards also get people if they need to "refer" a purchase or transfer (i.e. if they exceed their agreed credit limit).

You should ring up customer services and ask.

Ideally, well before the rate kicks in.

I am stoozing on a Halifax Card and have verbally confirmed the date the interest free on purchases ends, it also appears on the back of Halifax One card statements.

With my monthly spends on CC and a Halifax regular savings account at 10%, I make an additional £200 each year by putting the money from the credit card payments into a regular savings account.

Good luck with your interest problems.

-Andy

Hey Andy

Hes already mentioned he's been charged interest before on purchases, so its just the 0% balance transfer period hes referring to.

Hi,

I have a friend working in a bank and the way these interest charges work is, apparently, as follows (will try to refer to your case):

- the card provider will oblige you to pay a certain amount per month in order to keep the 0% interest rate (let's say 47 pounds); so you need to find out what is the the amount that you were paying BEFORE you made purchases on the account or what is this regular 47 pounds in my example (and check if you have finished paying the transfer fee interest - hope you know that there is interest on that too if you do not pay it in full in the first month as it counts as a purchase in their records!!!!!!???); you will still be paying the required amount in order to keep the interest free rate going until the end of your agreement (probably July in your case) and then the remaining (up to 57) will be interest on purchases including the transfer fee;

- now - this is what my understanding is - they NEVER make a mistake: anytime you make a purchase, the bank does not specify in its own accounts in the bank and in your statement, what the 57 pounds they charge you is for - smart as usual, they count it as payment towards both purchases and transfer amount and they normally charge you 'little', a bare minimum, so that you end up acummulating more debt from these purchases over the following months; this 57 pounds means that you are asked to pay a bear minimum on the purchases you made, which are probably quite significant; each month this unpaid sum goes up, but they will STILL ask you to pay a bear minimum, to you this is affordable, but to them you keep uping the amount (example: you purchased 200 pounds at 16.5 rate... but you pay only 5 pounds towards this amount next month as you pay what they say is your bear minimum payment.... so do the maths, up your 200 by the interest rate, take 5 pounds out and next month you are charged interest on the new amount...but you will still be asked to pay 5 pounds); the bank justifies themselves at the bottom of your statement by making you aware that by paying the 57 pounds you only pay the minimum required to keep the 0% rate plus cover some of the payment for the purchases (could even be 1p....) - so when your 0% rate deal ends... then you will see a substantial amount you will pay for the 8500... probably a couple of hundred pounds out of which the interest is at least your 57 pounds that you actually, ......pay now... so you give it ALL back to them over 6 months and then a little more too... and you will see that the amount of 8500 or whatever, tends to NOT go down as you will only pay back the bear minimum by paying 200 pounds only....in other words, the bank will do their best to make you keep the same amount you deposited one year ago until July this year...and that you pay nothing towards it other than a minimum sum which they then get back quickly as your new interest will be high...go compare how much you had in the account one year ago to what you have now - I bet that the new amount is higher... this means that 'you are a valued customer' and their strategy works - but don't even think that they made a mistake... they did not - these are computer run programs that do not make mistakes from such a large amount of money that you owe... not this global company....

the best thing to do, if you can afford this, given the debt you have, is ring them up and ask them how much you have to pay so that they do not charge you interest next month for the purchases you made this month and last month and 2 months ago for example; you would be lucky if you get a straight answer.... they will try to explain to you the 4 boxes-theory and it will all be very blurry

- these are unethical practices ... be aware.......but no one wishes to investigate these practices... sadly for the customer who thinks they get some help with their finances; if they cannot give you a straight answer try and threaten them with your customer rights to know - you have the right to know where your money goes

Thanks for all your replies. The paper bill came in and confirmed the estimated interest to be £187 next month.

Thankfully, I have some options to transfer the balance - rate is 2.2071 per month for all elements, ie balance transfer, purchases etc..

Well the sooner the better Jibrova, thats a shocking rate to jump to from 0%. £187 will be the projected interest by the next statement date, so if you transfer halfway through the month you'll save half the interest.

Eco

Planning to Eco_warrier and you are right, it's a joke of a rate.

Be warned anyone taking up Virgin's 0% transfer offer.

Nikita:

thebest thing to do, if you can afford this, given the debt you have, is ring them up and ask them how much you have to pay so that they do not charge you interest next month for the purchases you made this month and last month and 2 months ago for example; you would be lucky if you get a straight answer.... they will try to explain to you the 4 boxes-theory and it will all be very blurry

Hey

He wont be able to pay off last months purchases without incurring interest as he would need to clear the balance in full to prevent this. Also his payment allocation will dictate what is paid off first. In any case, as of now he is paying 26% APR on all the items on his balance. Best to transfer the whole balance asap.

Eco_warrior:

Hey Andy

Hes already mentioned he's been charged interest before on purchases, so its just the 0% balance transfer period hes referring to.

(see second half of my post: contact customer services and look on back of statement for an accurate date as to when the interest starts).

-AS

Never use the card for purchases

What you must all realise (as I did not) is that the 0% balance transfer only works if you NEVER EVER make any purchases on that card.

Don't apply to a company on whose card you already have a balance on purchases. Apply to another company and, after agreeing to the 3.0% (or whatever) transfer fee and your balances have been transferred, take the card and LOCK IT UP and NEVER EVER USE IT. Pay off the balance at the end of the free period by applying for another card with another company and transferring the balance across. Then CANCEL the first card.

What happens when you start to use a card for purchases on which you have made a balance transfer is that when you pay off the balance on the purchases, the crafty credt card company takes it off the balance you transferred at 0%, leaving the 15.9% (or whatever) on your purchases outstanding, so you get charged interest. The only way out is to bite the bullet, pay off the entire balance and use that card just for purchases, and another card for the balance transfers.

People like Moneysupermarket.com should warn you about this con, but it seems they are more interested in making comparisons than in giving sound advice.

Cigarette packets come with a warning "SMOKING KILLS" - 0% balance transfers should come with the warning "DO NOT USE THIS CARD FOR PURCHASES".

Don't make the mistake I did.

I believe there is at least one honest credit card company out there which does not do this. When I find out for sure I will let you all know. In the meantime if any of you know of a credit card company that is not party to this fraud please share the knowledge.