Balance transfer credit card deals subject to fees, warns consumer group
22 Sep 2015
Many borrowers could face paying additional fees on balance transfer credit card deals after being tempted by 0% interest offers, a consumer group has warned.
Such deals allow people to transfer old debts onto new cards.
Consumer group Which? estimates that around £334 million is paid in fees to do so each year – but few actually understand the costs that are involved.
In a survey conducted by the group, it was revealed that seven out of ten people incorrectly believed that the transfer was free.
Which? stated that the City watchdog should be made to rule on whether the fee should be displayed as a monetary sum rather than as a percentage.
The watchdog could even consider banning firms from advertising 0% deals when, in actuality, there is a fee attached.
The survey revealed that many consumers were blinded by interest rates on this debt – failing to realise that some deals were more expensive due to having fees attached to them.
Richard Lloyd, Which? executive director, said: ‘Too many credit card deals appear to include sneaky fees designed to catch customers out.’
‘With millions now using credit cards to pay for essentials, it’s vital that the Financial Conduct Authority takes action to ensure consumers are well protected.’
‘We want the regulator to scrutinise balance transfer deals and make it easier for people to understand their true cost.’