Customer hit by huge fees on 0% balance transfer card : Credit Card Guide

Customer hit by huge fees on 0% balance transfer card

A customer has explained how he was hit by huge fees by MBNA on his 0% balance transfer credit card as a result of a small oversight. Thirty nine year old Paul Williams took out a 0% balance transfer credit card in order to give him time to reorganise his debts and sort out his finances. These cards offer a specified period of interest free credit during which time consumers can try and clear transferred balances without being hit by interest charges.

With 0% balance transfer credit cards consumers are hit with transfer fees of between 2-3% of the total transferred balance. However, many still decide to take up the 0% offer in order to save on interest charges, which is what Mr Williams did when he took out the card, which offered 12 months interest free credit on balance transfers. However, due to strict rules that were buried in the small print the card ended up costing Mr Williams a small fortune.

After taking out the card Mr Williams said he set up a direct debit for the £5 minimum payments that the bank was asking for. However, after the bank changed this to £10 Mr Williams did not realise and therefore underpaid due to his £5 direct debit. As a result he was charges £12 by the card provider and had his 0% facility withdrawn, leaving him with a bill for £170 to cover the interest on his balance.

After some arguments MBNA did refund his interest and reinstate his 0% status. Mr Williams stated: 'I was shocked and stunned when this happened. I put my hands up that I made a mistake, but to ruthlessly withdraw my 0% rate and charge me interest at the full rate because of one basic error is harsh.'

Tom Smith
2nd March 2008

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