Virgin Credit Card should be 0% int... now charging??

masonsmum

I am submitting this thread on behalf of my husband so apologies if the details are quite sketchy as this is usually his department.

We changed our credit card to a Virgin card from HBOS One Card due to 15 months 0% interest on balance transfer and 3 months on purchases.

However we have been charged interest this month and my husband has contacted Virgin who have advised that any payments we have made up until now have been clearing the balance transfer and not the new purchases so we will now be charged interest on the balance.

We took the card out with 0% int on balance transfer until 18th Nov 09 and on purchases until 18 Nov 08. We were never informed that this was the way the balance and payments calculated.

Can anyone clarify if this is the correct process

King_Of_Fools

If you have done an balance transfer and made purchases on the card then every thing would have been interest free for the first 3 months but now only the balance transfer is interest free and any payments you make will go to pay off the cheapest debt first (i.e. the balance transfer). So the only way to stop paying interest is to completely clear the card. This is the same process used by pretty much all credit cards.

From http://uk.virginmoney.com/virgin/credit-cards-v1/faq.jsp

How is my balance paid off?

If you don't pay off your balance in full, your repayments will be allocated to balances at the lowest rates first. If you have balances attracting the same promotional rate, we will allocate your repayments to the balance at the promotional rate which ends first.
Please note, this applies whether or not the lower interest rate transactions have appeared on your statement yet.

YorkshireBoy

masonsmum wrote: »

We were never informed that this was the way the balance and payments calculated.

The order of payment is clearly detailed in the summary box and T&C's...lower rates of interest first.

The T&C's on this card changed in September, so that your payments were applied to the 0% offer expiring first. Prior to that, and on the old T&C's, there was no way you could avoid purchase interest from month 4 onwards.

Had you paid off an amount equal to all your purchases prior to your 18th November statement you would now be left with just the BT amount on 0%.

Golden rule: never mix purchases and BT's on the same card (unless you're skilled at disecting and understanding T&C's).

nomoneytoday

It's called a negative hierarchy. Most credit cards pay off the cheapest debts first. Nationwide are a known exception to this rule

clio

So are saga as well.[ exception to this rule ]

Joannef_2

I have looked at the t&c for the Virgin card but can't work out whether I will be charged interest on the balance transfer fee. I assume I will be as payments go towards the 0% balance first but does anyone know if I am right or wrong?
Thanks.

jamalfatty

BT Fee's are charged at the same APR as the BT itself, so if it is a 0% offer then no you wont.

YorkshireBoy

Joannef wrote: »

I have looked at the t&c for the Virgin card but can't work out whether I will be charged interest on the balance transfer fee.

See condition 2d (1st sentence).

FannyHill

jamalfatty wrote: »

BT Fee's are charged at the same APR as the BT itself, so if it is a 0% offer then no you wont.

I've also alway wondered if the fee to transfer a balance was 0% interest.
Are different credit cards different ?

I wrote a credit card cheque and the interest wasn't free but it was low about 40p per month for a £500 cheque but when I got my statement it was £1 charged for interest and when I rang them (MBNA) they said the minimum charge was £1. Couldn't find anything on the credit card cheques info telling me about the minimum interest.

jm28cardiff

Virgin told me on the phone that if I made purchases on my card, my monthly repayment would pay of the purchases first, not the balance transfer amount...however I didnt believe them, and made no purchases on it.

YorkshireBoy

jm28cardiff wrote: »

Virgin told me on the phone that if I made purchases on my card, my monthly repayment would pay of the purchases first, not the balance transfer amount...however I didnt believe them, and made no purchases on it.

If this was a new account, opened since September, and still within the introductory period on purchases, then Virgin were telling you the truth. See your T&C's (condition 2f).

However, you would need to pay off the complete purchases balance before the end of the purchases 0% period (3 or 6 months) so it wasn't locked in at 16.6% APR for the duration of the 0% BT introductory period.