My Tesco credit card was supposed to have 0% interest – so how did I end up being charged £119? SALLY sorts it

I am annoyed with the customer service at Tesco Bank because of my credit card. I have been an experienced credit card juggler for many years and always opt for 0pc balance transfers as I have no intention of giving away mine and my husband’s (Status Quo’s founder and drummer) hard-earned money.

But recently I checked my Tesco app and saw that my credit card had been charged £119 in interest. Because I always pay the balance via direct debit plus any additional lump sum amounts, I knew this was wrong. It was a nightmare to resolve this, and in the meantime I have to pay even more interest.

GC, Oxfordshire.

Sally Hamilton replies: From the opening verse of Status Quo’s 1979 hit What You Want, the following came to mind: ‘You paj your money. You make your choice.’ Only you seemed to have no choice about the unwanted interest.

Zero interest credit cards come in three different types: credit cards that have an interest rate of 0 pct. charge only on balances transferred from other cards; 0 pieces only on purchases; or 0 pc. on both transfers and purchases.

Your Tesco deal falls into the first category. It’s a balance transfer card with a 12-month term, meaning only the £6,000 balance you moved from your Barclaycard was eligible for the 0pc interest rate. This meant you could spread the debt repayment over a year, with no costs other than a balance transfer fee of £210.

You played your cards right for nine months – until September. By then, you would have around £2,200 left to pay off without interest in early January 2025.

However, at that time you used the Tesco card to pay for flights to Australia worth £4,500. But you didn’t want to affect your 0PC balance transfer deal, so quickly paid off the Tesco balance using your Barclaycard.

Shortly afterwards you saw the rogue interest charge of £119 on your account and panicked calling Tesco. After explaining what you had done, it was agreed to refund the interest, but only by first refunding the ticket price to your Barclaycard. This seemed like a complex way to solve things. Meanwhile, you saw more interest being added to your account.

I stepped in to ask Tesco if they could untangle the situation before interest grew further. It did this within a day and stated that it had done nothing wrong and had simply followed the rules of your card to the letter.

It was explained that the payment for the flights from your Barclaycard had been transferred to the Tesco account too early – before the purchase of your Australian flight ticket had been billed to your statement.

This resulted in the Barclaycard payment being applied to cover the remainder of the outstanding amount of the 0pc transfer rate. to pay off and resulted in a purchase balance of £2,234. It was this last balance that earned the interest of £119.

A Tesco spokesperson said: ‘Interest payments have been applied correctly as set out in the ‘Allocation of Payments’ section of the monthly statement. However, this was not the result the customer intended when making the payment. We have therefore taken a number of actions to resolve it, including a refund of the interest.’

It went further by treating the £2,234 debt as a balance transfer and has extended your 0pc deal for a further 12 months so you can spread the repayment costs. It added £75 as another goodwill gesture. You were elated.

My 100-year-old friend is a blind World War II Royal Navy veteran who relies on his TV to listen to the news and his favorite comedy shows. He also relies on his phone because he lives alone in the council flat he and his late wife moved into in 1976. Until this month he was paying around £36 a month for his Virgin Media service, which he considers an acceptable amount. But when his contract expired this month he was told it would rise to more than £70.

I called Virgin Media on his behalf. They sympathized, but only offered to reduce it to £60. After another attempt through the retention team, this was reduced to £53 per month for 18 months, after which it would rise to £76.

Can you convince Virgin Media to reverse this increase.

KB, Bolton.

Sally Hamilton replies: It is common in the telecom sector – and in other markets – to win customers by offering introductory rates for a certain period, then increasing the price when the deal period ends, usually after 12, 18 or 24 months.

But it does require customers to be involved in the renewal to ensure they don’t end up paying too much.

I’m the first to say it’s important to negotiate. Having just received a nasty renewal quote from the AA – 74pc. higher than last year for my car breakdown cover – I’m rolling up my sleeves to do just that. And if that doesn’t work, I’ll take my habit elsewhere.

But negotiating with providers can be a real hassle, and someone who is 100 and has a visual impairment should not have to play hardball with their provider, especially as a loyal customer. So I asked Virgin Media to investigate. The company acted quickly and offered to reduce the bill to £35 per month. Your Friend was warned that this will rise to £72 after 18 months, but Virgin Media confirmed the deal could then be renegotiated.

Incidentally, people on low incomes may be able to get a cheap broadband service from their current provider for as little as £10 a month, but customers will need benefits such as Universal Credit to qualify.

Virgin, which has two offers at £12.50 per month and £20 per month, says it is sending regular reminders to customers to check their eligibility. Your friend would have received a warning when his recent contract expired. However, the social rates would probably not have pleased him. These services are limited and in Virgin’s case do not include the landline and TV package it relies on.