0% Credit card deals may have hidden charges
Two large lenders with good balance transfer deals, MBNA and Barclaycard have started to charge for balance transfers.
Barclaycard's charges are 2% of the balance to be transferred up to a maximum of £35, so if a balance of £1000 was transferred a fee of £20 would be levied, however if a balance of £2000 was transferred a fee of £35 would be applicable as 2% would be above the set limit. Barclaycard's Ian Barber is quoted as saying "The charge is not a handling fee, but the price of getting 12 months interest-free credit on balance transfers. It costs us money to lend at 0% for 12 months and this fee, which is included in our summary box of charges, is one way of reducing that cost." MBNA's charges are even steeper - they too levy a 2% fee on the balance to be transferred however their maximum limit is £50 - today increased from £35, so a £2000 balance transfer would cost the customer £40 in fees. MBNA's John Greaves is quoted as saying "The charge itself is not increasing, we're just raising the cap. We find that customers are happy to pay a nominal amount to transfer their balance when they are saving money by switching to a cheaper deal."
Date published: 11/1/2004 10:04:25 AM
Financial News Feed Provided by OneCompare.com
| 
