living in debt is a lifestyle choice for millions

So far you haven't done any of it!

No I havn't my question is above in its original form.

I couldn't care less about the 50! I could make that and more with interest free money.

No it doesn't!

to quote (paste)

"You can transfer balances online at any time *from* existing credit or store cards, loans or overdrafts, or balances that your second cardholder has elsewhere."

In short you can transfer debt into your credit card account. An overdaft is a debt.

=================================================

The bit you are missing- that you have been told several times, yet you don't seem to accept is that a balance transfer is just a way of moving money. They don't know and don't care if you have an overdraft or not. They don't know and don't care if you have a debt on a credit card or not. If you ask for a balance transfer of X pounds all they do is send X pounds to the account you have nominated.

Some credit cards only allow you to move money to other credit cards, but I have just given you two that allow you to move money to a bank account.

I have never played the 0% game, but I did make a 0% balance transfer of several thousand pounds from Egg to my bank account to buy a caravan. I needed money fast and was going to lose money by taking it out of my savings account without giving notice.

So I did a transfer online and several days later it appeared in my bank account. I then withdrew it, in notes which is as close to real cash as you can get and paid for my caravan.

You really don't listen though do you?

You've been told that you do not need to make a 5% repayment on every card, some of them let you off with a 5 minimum if you don't have any interest.

Neb

"Mel Rowing" wrote

True, and if you ask for a balance transfer from a current account with an overdraft, the CCco will pay off your overdraft. But the way they do that is simply to make a money transfer into your current a/c. Now, if that current a/c didn't actually have an overdraft but was in credit ... well, they'd still simply send a money transfer to the current a/c and it would end up even more in credit!

"Mel Rowing" wrote

If you'd checked a bit more carefully, you'd have seen that the minimum is only 2% with Egg.

10,000 at roughly 8% interest (if the money is used to offset a mortgage at about 5%) = 800 a year. Unless my maths is off in which case Mr R will be in like a shot to tell us :-).

Ah! Now that is interesting!

I think you have unjustifiably equated don't know with don't care. The above clearly states transfers from overdrafts. An overdraft is a debt in any sense of the word. The card after all doesn't offer interest free advances does it ? I feel you might have breached the spirit of the offer. I can see however, that it makes no difference either way to Egg.

You don't move money to anywhere. It's Egg that does that. All you move around is debt (or alleged debt :>))

Oh I do! If you think otherwise you seriously underestimate me. When it comes to money in particular I latch onto every word.

Yes but your's isn't one of them.

It would appear that your minimum payment will be:

The greater of £5 or 2% of the rotating balance

plus in addition

the greater of £5 or 2% of the transferred balance

(assuming you don't take protection insurance)

Pay any more and it comes straight off your transferred balance. Therefore unless you pay up the full amount, you commit yourself to pay interest on 98% of your rotating balance. However, this latter of course could be placed on a second card.

In either case your 0% transferred balance of £9500 becomes

After

1 m £9310 2 m £9123.80 3 m £8941.32 4 m £8762.50 5 m £8457.25 6 m £8457.25 to clear or revert to standard rate.

Thus you don't retain full use of your 0% transferred balance.

"Mel Rowing" wrote

Not at all. Egg's Terms & Conditions, at section 9.3, refer :-

--------------------------

CREDIT CARD AGREEMENT REGULATED BY THE CONSUMER CREDIT ACT 1974

This is a credit card agreement between Egg ... and you, the person who signed this Agreement. ...

1. Use ...

9.3 You can ask us at any time: ... to transfer (by direct bank transfer) an amount from your Account directly to a specified current account held by you or an Additional Cardholder as long as the amount transferred would not make you go over the Credit Limit and is 100 or more.

--------------------------

There is no requirement that the current a/c actually has an overdraft.

"Mel Rowing" wrote

Not quite "every" - you didn't earlier!

"Mel Rowing" wrote

[Incorrect figures at end snipped.]

"Mel Rowing" wrote

So what? Isn't 9,000 useful to you? Or 8,500?

And use the other card which you were told about earlier, and the minimum payments will only be 5 per month

- you'd still have 9,475 of the 9,500 left at the end!

and the full section reads:

9.3 You can ask us at any time:

(1) to pay off an amount you, or your Additional Cardholder, owes to another UK lender and transfer it to the Account, as long as the amount transferred would not make you go over the Credit Limit and is £100 or more and is not used to discharge your or your Additional Cardholder's indebtedness to any part of the Egg plc group of companies;

(2) to transfer (by direct bank transfer) an amount from your Account directly to a specified current account held by you or an Additional Cardholder as long as the amount transferred would not make you go over the Credit Limit and is £100 or more.

[The numbers were added by me for increased clarity]

(1) applies to credit balance transfers which is what essentially we have been discussing.

(2) applies to cash advances which do not qualify as a credit balance and thus for 0% interest treatment. You can also put your card into an ATM type in your pin number and carry the cash to the bank yourself. That wouldn't qualify as a credit balance either.

Both would cost you 2% service charge (unless you held another account with Egg) and 1.597% p.m. interest thereafter.

And I just found this:

agreed it doesn't put the blame on 0% deals, but it has to be part of the problem.

tim

All of which you can easily avoid by managing your finances properly. The percentage charge to retailers on credit cards has come down significantly in the last 10 years or so, I believe. That's why credit cards are accepted far more widely than they used to be (IIRC 10 years ago most supermarkets didn't take them).

Again, only a mug pays normal credit card interest rates. You can avoid paying this by not using your credit card for borrowing, except of course for 0% (or low %) initial deals.

Which is probably due to the lower retailer charges.

Then they'll stop doing introductory 0% deals, presumably. That's what you wanted, wasn't it?

But the icing is what they're after with the 0% deals. Why do you think they want to subsidise 'balance transfers'? They want to attract customers who have built up big balances on other cards, rather than customers who pay their balance off every month.

It's not usually that high anymore, although it depends on the retailer. I very much doubt supermarkets pay 2-3%.

Which has been cut in recent years as the charge to the retailer has fallen. Other than Amex (who charge the retailer more), cashback over 1% is pretty rare or even non existant, except as an introductory offer.

"Mel Rowing" wrote

Yes, I know. I snipped the irrelevant bits for the situation we are discussing.

"Mel Rowing" wrote

Yes, which is why I snipped it as irrelevant. It applies to balance transfers from another **credit card**.

"Mel Rowing" wrote

No, we are discussing **current account** transfers. Totally different kettle of fish, and for which there is a different web page on Egg's site for these transfers.

Notice that "current accounts" are mentioned under section (2), not (1).

"Mel Rowing" wrote

There you go again making one of those wild statements, which is actually totally *false*. I'm beginning to think that you are doing it deliberately!

If you look closely you'll see that it mentions "by direct bank transfer" -- so is obviously not an ATM cash transaction, nor an over-the-counter cash transaction.

Cash is not involved at all.

"Mel Rowing" wrote

Of course. But we're not talking about that kind of transaction.

"Mel Rowing" wrote

Of course, no-one said it did!

"Mel Rowing" wrote

Oh dear - another one of those wild statements which are, in fact, wrong. You *must* be doing it deliberately!

The £48,000 was across 5 cards: Capital One (£15,000 limit), Egg (£10,000 limit), MBNA (£15,300 limit), HSBC (£6,000 limit) and First Direct (£6,000 limit).

I applied for all five online simultaneously one morning. All 5 come with 0% balance transfer deals. Crucially, both Egg and MBNA will transfer cash into your current account and treat it as a balance transfer, not as a cash advance.

So at that point you can see how it works. I just transferred amounts up to the credit limit from the Egg and MBNA cards to my current account. I now owed them £25,000, and had £25,000 in my current account.

I then transferred the Egg and MBNA balances onto the other cards. Egg and MBNA are now down to zero balance, so I then repeated the transfer from Egg and MBNA to my current account.

The net effect was all five cards maxed out, and the money in my current account. I then pinged it across to a deposit account, paying

5.2%.

It usually isn't possible to transfer the entire credit limit. MBNA and Egg limit you to 95% of it; Capital One requires you to leave £100 in there. So I ended up with £48,000 on deposit, all of it borrowed at

0%.

Of course you still have to make the minimum payments. The simplest way to do this is to work out what they'll be each month, and then do a regular transfer from the deposit account to the one the credit card DDs are coming out of. It helps that MBNA's payment is £5 rather than a specific percentage.

As the 0% period expires, you transfer the balance to new 0% cards. In this way, the cash never leaves your deposit account.

After about 6 months the deals started to expire, so I applied for a few more. At this point, because I appeared to be up to my arse in debt, the limits I was offered on newer cards were a bit pants and I found I had to scale back to about £28,000 in total. It was £34,000, but I got fed up with Mint screwing the account up and I actually paid that one off early.

£15,000 expires in May and the rest in August. I shall apply for a new card in mid-April.

My average balance last year was about £45,000. At 5.2% gross, that's about £1,400 a year after higher rate tax. Paid for the family's summer holiday, basically. We moved and are now renting so my ability to command big credit limits may have reduced. Still, I have heard of people on basic rate tax who have £80,000 stashed away like this, so we'll see.

Of course you never, ever, ever use the 0% cards for anything else. Purchases are done on a Platinum Amex (because it pays 2% cash back) and an Accucard (0.5% cashback). As soon as the 0% balance has been cleared, the account is closed. Then in a few years you can apply for another one :-)

"Having now looked into it, I find that what it all amounts to is an old scheme in an updated guise. They do say there is nothing new under the sun. What it amounts to is delayed debt repayment."

No, that's actually something different and is in fact another variation on the theme elaborated in my last post.

Some credit cards offer 0% on purchases for a certain time as an introductory offer to new customers. This is quite lucrative. What you do is pay the minimum each month to the credit card, and deposit the difference into a savings account. At the end of the 0% period, you use the money in the deposit account to settle the balance. There will of course be interest in there too, which is yours to keep.

"What I would caution against is the very notion of delaying payment of

that which you owe might, in some create a confusion between assets and liabilities."

You're right there. It is important not to mix up capital with expense, which is why I don't like offset mortgages in principle (apart from the fact that they are really only worthwhile for people with small mortgages).

"Now you point to me the benefit that allows me to draw interest free

*cash* from here and place it in a bank account."

What balances can I transfer? You can transfer balances from credit, charge or store cards, loans or overdrafts. Each balance must be a minimum of £100.

"Quite why it is that the majority 'good' customers should fund the peverse borrowing techniques of a few leaches is beyond me. Personally, I think interest free credit transfers should be banned. If they don't wash their own face they shouldn't be in the system."

It's just the cost to the CC of acquiring a new customer. Doesn't matter whether it's advertising, 0% transfers, or a wrap of coke with every new card application - a cost is a cost is a cost.

I certainly do! Breaking the spirit of the deal as I have said before but if Egg (and apparently MBNA are prepared to transfer non existant debts onto credit cards as credit balances rather than cash advances not once but repeatedly then who are you to complain?

Thank you! My questions have now been answered. No wonder Egg struggles (I don't know about MBNA)

,

Pretty sure Access and MBNA have had these longer than 5 years (although they might have been *only* 20...)