Warning issued over balance transfer credit card fees!
A warning has been issued from a consumer group after it has been revealed that borrowers are being enticed by 0% interest offers and ending up being caught out by fees on balance transfer credit.
The deals are allowing people to put old debts onto a new card. According to the BBC, Which? has estimated that consumers pay about £334m in fees to do so each year, but it said few understood the costs involved. There have been calls to make these costs more obvious to consumers rather than disguising them with a 0% interest title.
The survey conducted by the consumer watchdog revealed that seven out of 10 people incorrectly thought the transfer was free.
The BBC reports: ‘Which? argued that the City watchdog should rule on whether the fee should be shown as a monetary sum rather than a percentage, or even consider banning firms from advertising deals as 0% when there was a fee.
It said that many people were blinded by the interest rates on this debt, so failed to realise that some deals were more expensive owing to the fees that were charged.
It also pointed out that these products were best for those who wanted to pay off credit card debt, and not those who needed the credit card for further spending.’
Millions of people are now using credit cards as their main form of payment and therefore it is essential that the Financial Conduct Authority takes action to ensure consumers are well protected.
CLICK HERE to read the full article over on the BBC News website.