The advert for MBNA's Platinum Plus Visa Card boldly claims that you can save £486 in five months if you take advantage of its 2.7 per cent interest rate for balance transfers.
However, this is only when compared with one store card, the FraserCard, which has an exceptionally high APR, of 29.3 per cent. It also assumes someone is transferring £5,000 from FraserCard to MBNA and then only making the minimum monthly payment. MBNA says: 'We do get a lot of people transferring from store cards and this is where you often get the biggest saving.'
Other cardholders will make much more modest savings. Transferring £1,000 from the HSBC Platinum credit card will net a saving of just £47.
Purchases and balance transfers after five months will attract a rate of 15.9 per cent, which the adverts describe as 'very competitive'. But anyone looking to take advantage of promotional offers can do better elsewhere. For example, Nationwide is offering 3.5 per cent for six months on balance transfers and purchases. Thereafter, the purchase rate beats MBA at 14.6 per cent. The advert also states prominently: 'No annual fee'. Yet of the 154 credit cards listed in the March issue of Moneyfacts , only 22 charge an annual fee.
Seen an offer or advertisement which sounds too good to be true? Then write to What's the Catch? The Observer, 119 Farringdon Road, London EC1R 3ER.
