The managing director of Capitol One UK, Brian Cole, has come out against practices by many credit card companies looking to maximize profits through their interest free balance transfer offers. Although the offers appear to be a good way to lessen debt and to jump start a plan to pay down current debt, a mistake made by the consumer can be costly.
If a payment is late or missed or if the credit limit is exceeded, a penalty charge is incurred. Also, the interest free period can immediately be ended by the credit card company.
Up to 30% of those on interest free balance transfers have their promotional period ended early by their card companies.
Often these penalties are not clearly spelled out by the credit card companies. A consumer must search through numerous pages of the agreement to find them. Cole believes that consumers should not necessarily be wary of interest free balance transfers, but to do their homework and understand the terms.