The gotcha behind 0% credit card balance transfers
At the beginning of this year I have financed solar panels on a low interest line of credit with Scotiabank. In May I became aware of the 0.00% balance transfer option my MBNA credit card was offering and shortly afterwards I had the line of credit transferred to my credit card.
I have done the home work, worked out the total costs (fees) to transfer over, called in to learn how things worked, confirmed there would be no interest charged, even confirmed that it will be ok for me to transfer any remaining balance back onto my line of credit before the promotion ended.
Furthermore I recall explicitly asking what is the catch or hidden costs or anything else I should know about and was told there are none and no.
When the first statement came it did show 0.00% promotional offer on the transfer and no interest, I felt smart, savvy, and proud to have saved a few hundred dollars in overall interest costs.
But there is a gotcha that got me!
Yesterday I took a close look and to my shock discovered I have been paying interest charges on every statement since my initial check.
As seen in the picture the huge gotcha is that any new purchases after the balance transfer are charged the full 19.99% after the month grace period because any payments you make are going against you balance transfer! Serious trickery I tell you!
I will be calling MBNA in hopes they will see that I was misinformed and reverse the interest charges, and to others considering saving a little on interest be wary of my experience and DO NOT make new purchases on the card. If you found this useful feel free to comment or follow me on twitter @danielsokolows.