End of Natwest Interest Free Period - Question

Colin_London

We are currently stoozing the cost of our wedding and honeymoon (£14k) on a Natwest Platinum Card. We have all the money required to pay it off in a savings account with YBS.

The Interest Free period ends at our next bill date, at the beginning of January. The comment on the latest bill however is that if we pay the minimum balance in December, the estimated interest on our next bill is (still) £0.

The question is, should we pay off the balance this month, or only pay the minimum this month and pay the balance off in January?

My first thought was that if we paid the minimum this month, our next bill would show £0 interest (as the period it covers is still interest free), and we would then have the standard interest free period during January to pay off the full balance by the end of january (an extra whole month of savings interest, albeit low due to the recent reductions).

However, I have a niggle that maybe we wouldn't get an interest free period in January, and if we did the above we might get clobbered with a huge interest charge on our February bill.

This is the first time we've done this, so any advice would be welcome.

Thanks,

Colin

NickX

Personally I would not rely on the estimated interest figure being zero.

I would ensure that all the funds are repaid before the date that NatWest say is the end of the promotional period allowing some time for the payment to be processed.

Remember that the standard "interest free period" of up to 59 days only applies to Purchases and may not apply to Balance Transfers.

Hope this helps.

Colin_London

Thanks NickX,

As it happens less than £1500 of the total is whats left of an introduction balance transfer (wedding booking costs from my personal card onto the new joint card we got for this purpose). The remainder is 'purchases' made since then. The minimum payments we have been making each month have been taken off the balance transfer total first, leaving the purchase total untouched.

I tend to agree however that it probably isn't worth the risk, particularly with interest rates on the savings account dropping like a stone we're not going to be making very much to make the risk worthwhile (I'm expecting last months 1.5% drop to hit the YBS rates any day now).

Think you've helped me make my mind up! Have to shuffle the money through our current account shortly what with the time to transfer money out of savings, and the Christmas Break coming up.....

(EDIT - Just checked and YBS have dropped their rate to 4.5% on 30/11/08. Of course there will be another drop towards the end of December due to last weeks 1% reduction).

johnllew

Ring them up and ask them the precise date the IFP will end. Some issuers (MBNA & Abbey for example) will extend the promotional period beyond the date it was supposed to end. Take a name and extension/reference number and ask thge CSA to confirm the call is recorded. Ask if you can pay on the end date by debit card to squeeze the very last drop of profit out of them; RBS cards will allow this but I can't recall if NatWest cards do, though they're part of the same group.

Milarky

The end date* should be the statement date of January. Therefore I would say NatWest needs to receive payment by that statement date. The fact that estimated interest is '0.00' is correct in this case - because no interest is due for the whole month of December/January. Standard rate interest is due for the whole of January/February however.

*Your Statement for November ought to contain the following message:

IMPORTANT INFORMATION
Please note that your introductory
balance transfer rate will expire
[Date in January], the standard
monthly variable rate will apply
after that date.

(How to pay)
If your DD is set up for minimum payment then pay the difference between the current statement and the amount due to be collected. The DD should be unaffected by any payment you make - and certainly will be if your payment only arrives after it - which is ususally five days before the next statement is produced.

If you have sufficient funds to have the full amount taken then changing the DD by request from 'minimum' to 'full' is an option (sometimes!) but a wasteful one IMO. Far easier to arrange your own combination of payments to take the balance right down to zero.

***According to the APACS sortcoderchecker the sort code for Natwest credit cards (62-19-70) is now enabled for faster payments*** so a payment could be sent on statement date and still arrive J-I-T if your bank currently uses FPS (If you bank doesn't then its '2 working days' before that you must settle)

I've just paid 1p from Natwest savings to my Natwest credit card and the payment is expected to arrive today according to the on-screen message. This ought to be confirmed tomorrow when the credit card balance itself updates.

Update: Although my 1p took shows as 'posted' on the same day as it was paid, it only shows as 'transacted' on the day later. Confusing! - but certainly that is quicker than the standard 2 days of BACS.

Colin_London

Thanks Milarky,

In the end we decided that the worst case situation (as set out in your email) was probably the case, so the transfers have been arranged to pay off in full before the beginning of January.

Although both our Current a/c and Natwest had supposedly started faster payments by the time last months payment went through, it still took 4 days to arrive. What with Christmas bank holidays we're not taking any risks, and so the transfer was arranged to come out today.

Also important info for stoozers paying off sums over £10k. Note that faster payments timescale only applies for sums up to £10k (excepting Standing Orders where the limit is £100k). Presumably if the amount in a transfer exceeds £10k it will still take the old timescale to clear.

I'm guessing this limit is to protect the (fee cargeable) CHAPS system, which is used for large transfers such as conveyancing, from competition.

YorkshireBoy

Colin_London wrote: »

I'm guessing this limit is to protect the (fee cargeable) CHAPS system, which is used for large transfers such as conveyancing, from competition.

I believe it's simply an anti-fraud measure, rather than a revenue generating measure.

The_Aviator

Milarky are you 100% sure of the Quote you made regarding what should be printed on your final statement before your 0% period expires? I also thought this to be the case however according to Halifax this is not so.

I'm asking as I have just been caught out with the Halifax. My Jan statement gave me my balance and a min payment with a box stating "estimated interest £0". I paid the minimum payment as usual just before the "reach us by" date. The Feb statement gave me similar info except as I am now getting to the end of my 0% period the "estimated interest" box gave a figure. There was no other information stating the end of the interest free period however I gathered that is was due to the estimated interest figure so I paid the outstanding balance in full, again just before the "reach us by" date.

I was therefore suprised to see interest on my March statement. After a call to Halifax they informed me that my 0% period finished at the beginning of Feb just after the previous statement date and so I have been charged interest from that date until my latest payment reached them.

When I challenged them about this date they said "you should remember it from when I took the agreement out"....this was 15 months ago!! Surely I have an arguement against this??

Cheers

Moggles_2

The_Aviator wrote: »

Milarky are you 100% sure of the quote you made regarding what should be printed on your final statement before your 0% period expires? I also thought this to be the case however, according to Halifax, this is not so.

Presumably M's post relates to NatWest and the RBS stable in general. Halifax belongs to HBOS.

The "estimated interest next month ..." statements were designed to help consumers. Unfortunately, they lull some into a false sense of security. Even when this message changes to £X, you still won't know the exact expiry date, which is shown elsewhere on HBOS monthly statements.

Rather than rely on your own calculations (mine have been hopelessly adrift in some cases), best practice, IMO, is to check the expiry date when you phone to activate the new card (there's often a Freefone number for this) and diarise it there and then. That way you know exactly where you stand.;)