Why Brits should make sure they read small print in UK credit card offers

You may have been reading recently about the demise of the 0% balance transfer offers that UK credit card companies have actively been promoting for the last few years. You may even have been told that this was because UK credit card providers had wised up to the fact that credit card debtors in the UK were using this as an easy an convenient way to repay their UK credit card debt. If that’s the case you may well have been thrown by recent offers like the one made by Capital One which not only offer 0% on credit card balance transfers, but also offer a whopping 18 months interest-free on any balance transfer.

If that’s the case, you haven’t been reading the small print in UK credit card offers!

While deals like the one being offered by Capital One seems very attractive, if you check the small print of Capital One’s Platinum MasterCard application form very carefully you’ll find a small clause that states that you qualify for the 18 months interest-free credit on your balance transfer if, and only if, you use the same credit card on purchases worth at least £100 for the first three months.

However, as Nick White from uSwitch.com has pointed out, most UK credit cardholders who are looking to take advantage of a 0% balance transfer offer are not looking to also use the credit card in the first three months they have the card because they have specifically transfer the balance to a 0% promotion offer specifically to reduce their outstanding credit card debt. Obviously this process becomes much more difficult if you then have to use the same credit card to make more than £100 in purchases in each of the first three months. Indeed, this may well be more than you had originally budget to make in repayments each month, the net result of which may mean that you end up with more of an outstanding credit card balance than you originally had!

The trick, then, appears to be to make sure that if you apply for a new Capital One Platinum MasterCard that not only do you make sure you won’t be charged interest on any new purchases during the promotion period, but also that you spend £100 a month on new purchases during the first three months and that you make sure that you only spend £100 a month. You will also need to factor this £100 sum into your monthly credit card repayments – if you want to make sure that your aim of reducing your UK credit card debt is successful.

Overall, however, the lesson to be learnt from the new batch of 0% balance transfer promotion offers being made by UK credit card providers is to make sure that you read the small print in the terms and conditions of the UK credit card application form very carefully to make sure that you are not falling foul of any terms that would mean the UK credit card provider is allowed to revert back to the 15% or more APR that is being charged on credit cards which form part of the credit card issuer’s standard package.

Richard Smith
29th October 2006

More Information:

• Quick Balance Transfer Guide
  Balance transfers allow card holders to transfer the money they owe to their existing credit card to another, usually at a special rate of interest. The new credit card company pays off the old credit card debt and transfers it to the new card. This article will tell you how to play the game.
• The True Cost of Balance Transfers
  Balance transfers are a great way to consolidate credit card debts into one place, especially when there are many 0% deals available. However, there are hidden costs.
• Common Credit Card Mistakes
  With credit cards now outnumbering people in the UK you would be right to assume that not everyone in this country uses their credit cards either correctly or wisely. But what are the most common mistakes that credit card holders make when using their credit cards?
  

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