Fool.co.uk comments on sneaky balance-transfer deals

David Kuo, Head of Personal Finance at Fool.co.uk, said: “It is disappointing, but not entirely surprising, to see credit-card companies sneak in higher charges.

“Lloyds TSB rightly deserves to be outed by Moneyfacts for the particularly devious way that it purports to help financially-stretched consumers through its 0% transfer offer. However, what the bank gives with one hand it literally takes back with interest with the other.

“The Lloyds TSB 0% transfer deal is especially nasty because it preys on consumers who fail to grasp the finer points of negative payment hierarchy. This is where banks clear off the cheapest credit first, leaving debts with higher interest rates to build up.

“Perhaps Lloyds TSB, as the first domestic sponsor of London’s 2012 Olympics, may want to suggest running up a down escalator as a new Olympic discipline – that is precisely what they are asking customers to do through negative payment hierarchy.”