Virgin card - allocation of payment

TraceyB_2

I have a Virgin card that has a 0% balance transfer until Oct 2010 of which I have taken advantage of.

I have used this card as well to make purchases but am now concerned that when I pay off the purchases that I have made, this payment will in fact come of the balance transfer and therefore incur me interest on the purchases I have made (hope that makes sense!).

Can anyone confirm that I have got this completely wrong - please!,

Due to redundancy, I do have the money to clear the lot but would prefer to keep the money in my account thank you very much!!

Thanks in advance

noh

You are correct.
Any payments you make will reduce your 0% balance.

From the summary of account conditions.

If you do not pay your balance in full we will use your payments:

• to reduce lower rate balances before higher rate balances....

TraceyB_2

So, basically, to avoid paying interest, i will have to clear the whole card?

Should have put the purchases on another card and just cleared that.

Lesson learnt I guess

exel1966

TraceyB wrote: »

I have a Virgin card that has a 0% balance transfer until Oct 2010 of which I have taken advantage of.

I have used this card as well to make purchases but am now concerned that when I pay off the purchases that I have made, this payment will in fact come of the balance transfer and therefore incur me interest on the purchases I have made (hope that makes sense!).

Can anyone confirm that I have got this completely wrong - please!,

Due to redundancy, I do have the money to clear the lot but would prefer to keep the money in my account thank you very much!!

Thanks in advance

You're not wrong and by now you would have realised that you should never* spend on a card you have BT'd to unless you have the same intoductory offer for purchases and BT's.

* general rule, there are exceptions where it may cost you very little.

How much have you spent and what is the APR ? It may still be cost effective to not pay off in full just yet and pay minimal interest.

YorkshireBoy

Stop!! Read your T&Cs, specifically condition 2f.

If you're still in the 3/6 months 0% on purchases period (are you?) your payments will go towards the purchases balance first because that's the 0% offer that expires first.

By paying off the value of those purchases (total purchases made less any payments already made) before your 3rd/6th statement date your 0% on BT offer remains intact.

TraceyB_2

I am literally just out of the three month 0% on purchases period - I have spent about £600 and the APR is 16.6 (I think!). The rate of interest for purchases is 1.2916%.

YorkshireBoy

TraceyB wrote: »

I am literally just out of the three month 0% on purchases period

Oh dear!

I have spent about £600 and the APR is 16.6 (I think!). The rate of interest for purchases is 1.2916%.

Yes, that's 16.6% APR.

So over the next 12 months your £600 balance (less any payments already made?...did you look at your T&Cs?) will incur a little less than £100 interest.

The next question is how large was the BT (as inferred by exel1966 above)? If less than £3,300 it could be worth shifting it elsewhere. If more than £3,300 then the (I've assumed 3%) BT fee for shifting it will be more than the interest accruing on your purchases balance.

TraceyB_2

Sometimes the obvious is staring you in the face until someone else points it out - my husband has credit on his card with a balance transfer offer so I will pay off the purchases as I had intended and then transfer over the balance to his card.

The balance is for £2000. So I can keep my redundancy and keep making the minimum payments on the balance and obviously wont use that card to buy anything!!

Many many thanks for your quick and easy to follow explanations.:beer: