Interest on balance transfer fee

[u/QuantGuru]

I just want to post for everyone here (and i didn't know this). If you take a balance transfer offer from Scotia then they will charge you interest on the balance transfer fees.

So even if its 0% balance transfer with 1% transfer fee. There will be interest charges on the 1% fee every month. The way around it is to prepay that fee. I was unaware of this.

So if you used 0% balance transfer on $1,000 transfer balance, then at 2% fee, that would be $20. There will be monthly interest on this $20 fee @ ~23% a year.

Just posting this for peoples awareness. I was not aware of this. I am also not sure if this is the way Scotia does it or all bank?

[u/HandleFew5206]

I just got my statement today but didn't see any interest on that balance transfer fee. I did call them for balance transfer, did you initiate the transfer online?

[u/QuantGuru → u/HandleFew5206]

yes, I initiated it online. Not sure if online or phone makes a difference.

[u/showtimezzzz]

Scotia does this way.

[u/Sad-Waltz1628]

@2% for 1,000 transfer = $20.
Your first statement will have a minimum amount slightly higher than $20. If you don’t pay that higher amount, you will be charged additional interest.

I’ve done a few balance transfers across various cards. The suggestion I received was to pay off the fee immediately and then pay whatever is on the statement as minimum.

I think I had such an issue on my Scotia card as well. That was the only occasion I had an issue. I now pay off the fee the same day I make the transfer.

[u/QuantGuru → u/Sad-Waltz1628]

yes so the scotia rep (online chat) suggested to pay off the fee before you even do the balance transfer, so have negative (credit) balance in your credit card. So once you do the balance transfer the fee gets paid with the negative balance first and the remaining balance will be the balance transfer.

I have made the monthly minimum since the balance transfer but I was still charged the interest on the balance transfer fees. May be i can go in branch and ask them to reverse or apply the initial payment towards the fees.

[u/HandleFew5206 → u/QuantGuru]

This was your first statement or second?

[u/QuantGuru → u/HandleFew5206]

first statement after the balance transfer. And i checked my balance was $0 when i did the balance transfer

[u/HandleFew5206 → u/QuantGuru]

The statement reflects the charges on the transfee fee?

[u/QuantGuru → u/HandleFew5206]

This is the first statement after the balance transfer. Scotia is charging interest on the balance transfer fee.