Credit Card Terms & Conditions

[8BALL]

I have applied for the Capital One credit card because it has a 0% balance transfer until August 2007, but after reading the terms and conditions, it sounds a bit dodgy to me.I want to transfer a balance of �3500 which I aim to pay off before August 2007.If I do not manage to do this, am I liable to pay backdated interest.I am just concernred that in the terms it states under the heading 'Total Charge for Credit'

At the time the agreement is made,is �725.30

Comprising interest in the sum of �725.30.

I am not quite sure what this implies.Please can anyone offer any advice.

[andy-hughes]

All Credit Card companies rely on human nature, which is to stack up more than you can pay, so they make money. This includes the 'interest free' deals. they are banking (sorry!) on you not paying off your balance, so they can wallop you with huge interest charges outlined in the small print. A percentage of transferes will pay their balances off, but a significant number won't. It's also human nature not to dance from one lender to another so ...

Get to July 2007, then move the remaining balance to another card provider with a 0% deal. It's perfectly legal, it's just that most people can't be bothered, or forget. Keep on transferring until your debt is gone. Play them at their own game, and you will come out the winner.

[andy-hughes]

Sorry, in case I wasn't clear -

Make sure you transfer your balance to a company that will allow you to transfer a credit card balance - some don't. If not, borrow from your bank, and make sure your Capital One balance is cleared by the due date. A bank loan will always be cheaper than a credit card, and make sure you are disciplined enough to clear this debt without getting any more credit - human nature again, don't fall for it.

[Neeru247]

You might want to check that Capital One do not charge for balance transfers (about 2% of the sum) as most credit cards companies caught onto the fact that many people were jumping from one interest free card to the next (too right) and decided to do something about it! See http://news.bbc.co.uk/1/hi/business/4159400.stm

[AreebaAreeba]

Alas. The days of 0% balance transfers with no financial charges are well and truly over. The golden days of beating the banks by a little effort now and again have been sewn up by their introduction of a 'balance transfer handling fee' usually about 2% of the transfer and usually, though not always so be careful, capped at about �50. This cheeky charge was introduced to stop the small handfl of people, myself included, who utilised the 0% balance transfers of the past to effectively get completely free borrowing.

If you pay your balance off before August 2007, there shouldn't be any interest charged to your account. If these are standard terms and conditions then I seriously doubt they have been tailored to your specific borrowing requirements: did you even tell them the amount you want to transfer? If not, how could they possibly forecast how much you would have to pay in interest? Credit cards rarely, if ever, provide a personal borrowing illustration as there are too many factors to consider.

I suspect this may be an example of a repayment structure at their normal borrowing rate, once the 0% period has expired. Re-read the small print and see if this is the case.

Personally I'd still utillise the 0% offer for a sum of �3500, particularly if the transfer fee is capped at �50, as the interest you would pay on this at normal credit card rates would far exceed this over 15 months.

[8BALL]

AreebaAreeba, I did specify a transfer of �3500 when I applied for the card, so I am fairly sure that the �725.30 stated in the terms is related to the �3500.I am just worried that if I do not mnage to pay back the full amount in the agreed time, that I will get hit with an instant charge of �725.30.

I agree that even if this was the case, it would still be worth doing, and then about a month before the 0% period is up, I can then transfer whatever is left, to another 0% card.

Thanks everyone for your advice.