Having got a new Virgin credit card to shift debt to for the purpose of Stoozing (making free cash from credit cards for the unitiated) I was rather surprised recently to receive its text, “Hi did you know your 0% on Virigin credit card purchases ends 11/05/2007! So fill your boots while you can plus get 10% off loads of companies. Sweet!”
While the tone looks fun and sweet, this message is in my view both deliberately and nastily manipulating – and here’s why:
1. It should say STOP SPENDING QUICK the 0% is ending. The fact the 0% period is running out soon is a reason to stop spending, not start spending. While things bought on it now won’t attract interest, come June they’ll be getting on for 20%, so moving to minimise expenditure on the card is the key for most people. After all, if you’re interested in the 0% period, that means you’re not paying the card off in full each month, which means you’re probably still going to owe money in June.
2. ‘So fill your boots while you can plus get 10% off loads of companies. Sweet!’ Doesn’t this sound fun, yet actually look again and of course this is all about impulse spending. The limited range of goods on offer at 10% discount are not planned expenditure – again not something you want to borrow for.
3. And WORSE! My debt is a balance transfer. Regular MoneySavers will know where I’m going, but if not, this is one of the most devious things credit card companies do. I have a 0% balance transfer on the card, if I spend on the card, once the 0% rate for purchases ends, all my repayments will be prioritised on paying off the cheap balance transfer debts, leaving the expensive debts from spending sitting there, and I’d be unable to repay it unless I cleared the cheap debt. The extolling me to spend – would be hugely profitably for them – and very costly to me (for a proper explanation of how this works read the Best Balance Transfers article.