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The credit card lottery: what you see is not what you’ll get

Finance experts TotallyMoney reveal shocking figures that show many are being handed a credit card offer very different to the one they applied for.

  • Regulations say only 51% of people must get the rate shown — while the other 49% may get stung on interest rate, offer duration, and credit limit
  • A 0% balance transfer offer could be cut by a whopping 14 months after an application is accepted
  • The APR (annual percentage rate) on a card could be hiked up by 15% from what is advertised
  • A surprising 10% got a card with a shorter 0% offer than advertised*
  • 11% say they were landed with a higher interest rate than they applied for

Although it’s not unusual for lenders to assess a borrower’s creditworthiness when they apply for credit, the latest research from TotallyMoney and MoneyComms reveals that many customers end up with a very different product to the one they wanted.

Instead of rejecting them outright, the lender deems the customer creditworthy enough to accept their application, but not creditworthy enough to grant them the deal that initially enticed them.

As a result, customers are stung with a higher interest rate or shorter offer period than they anticipated.

Nasty surprises

Customers can find themselves in unexpected situations, as many lenders who offer alternatives in this way don’t always explicitly call out that they do so. This means customers can get a nasty surprise when the card arrives in the post.

Customers looking to cut the cost of their current credit card balance or reduce interest on their day-to-day spending could apply for a balance transfer or purchase offer credit card. However, the offer they apply for could be drastically slashed by over 50%.

Moreover, customers could see the interest rate on a card hiked up by 15% from what they actually applied for. This could potentially make the cost of borrowing far more expensive than expected.

Alastair Douglas, CEO of finance experts TotallyMoney, comments on the unsettling situation: “The positions people can find themselves in due to the way lenders mitigate risks are quite concerning. To apply for a product and be sold something completely different is a troubling situation, and could throw someone’s financial plans into complete disarray.

“The harsh reality is that a 29-month 0% balance transfer deal could be slashed to just 16 months, and the 19.9% interest rate advertised could be hiked to 34.9%. These are clearly very different products to what customers thought they would get.

“That’s why at TotallyMoney we work closely with lenders to improve transparency for our customers, so they’re not landed with a deal they didn’t apply for. We push for pre-approval, so customers know they’re certain to be accepted for an offer before they apply. And, with guaranteed rates, they know that the interest rate they see is what they’ll definitely get if they’re accepted.

“At TotallyMoney, we’re on a mission to improve the UK’s credit score and help our customers move on up to a better financial future. Our free credit report and credit report analysis shows customers how they could improve their credit score, so they could start seeing better credit offers — including pre-approval and guaranteed rates, which can help prevent them from getting something they didn’t want.”

Table 1 - Examples of 0% advertised duration v potential duration under risk-based pricing

Provider 0% product type Advertised term months Could be down sold to (months) Difference
Barclaycard Balance Transfer 28 14 -14 months
Halifax Balance Transfer 29 16 -13 months
Lloyds Bank Balance Transfer 28 16 -12 months
TSB Balance Transfer 20 10 -10 months
Sainsbury's Bank Balance Transfer 27 19 -8 months
Halifax Purchases 20 6 -14 months
Lloyds Bank Purchases 20 6 -14 months
Barclaycard Purchases 25 12 -13 months

Table 2 - Examples of potential increase in purchase interest rate compared with advertised rate

Provider Advertised Purchase APR Potential Purchase rate (APR) based on risk Potential increase in Purchase APR
Post Office Month 19.9% 34.9% +15%
NatWest 19.9% 29.9% +10%
Sainsbury's Bank 20.9% 29.9% +9%
Barclaycard 21.9% 29.9% +8%
Halifax 19.9% 27.9% +8%
Lloyds Bank 19.9% 27.9% +8%
TSB 7.9% 15.9% +8%
Bank of Scotland 9.9% 16.9% +7%


* research 20.01.2020
Nationally representative survey of 2,000 adults, commissioned by TotallyMoney and carried out by OnePoll, survey date 20/01/2020–22/01/2020

For more information, please contact the press team

About TotallyMoney

With a focus on the one in three UK adults financially under-served by the financial services industry, TotallyMoney is the credit app on a mission to help everyone move their finances forward.

TotallyMoney believes people’s financial data should work for them, and not against them and with more than four million customers, they provide the UK’s only free, live credit score and report.

Its service helps customers understand their financial position and provides personalised recommendations so they can start creating financial momentum. TotallyMoney also works closely with leading lenders, to ensure eligible customers are matched with the right products, underpinned by its robust data, product and tech capabilities.

TotallyMoney is regulated by the Financial Conduct Authority (FCA).

We're on a mission to help everyone move their finances forward and gain financial momentum.

TotallyMoney is an independent credit broker, not a lender. Our comparison service works with most leading lenders, covering the majority of the market. Though we may be paid a fee by lenders or brokers this never influences how our products are ranked.

We don't provide financial advice. Product information is obtained from independent sources and rates displayed may vary depending on your personal circumstances. While we make every effort to ensure that information is up to date, you should always confirm the terms of the offer with the product provider.

TotallyMoney is owned and operated by TotallyMoney Limited which is registered in England and Wales (Company Registration Number 06205695). TotallyMoney Limited is an Appointed Representative of TM Connect Limited, which is registered in England and Wales (Company Registration Number 06967012) and authorised and regulated by the Financial Conduct Authority in respect of consumer credit related activities (FCA FRN: 511936). Trading Address and Registered Office: Chapter House, 16 Brunswick Place, London N1 6DZ. Credit is available, subject to status, only to UK residents aged 18 or over.

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