Balance transfer and purchases.

Xpheroid

Hello there,

I have just got a HSBC card with 0% BT for 12 months. I have just read the terms and conditions and it states:

"Your payment is allocated to promotional rate Balance Transfers, then Purchases and standard rate Balance payments Transfers, Credit Card Cheques, and lastly to Cash Advances (full details are set out in Other Financial information in the Agreement Terms)."

Does this mean that if I have purchases on this card as well, the monthly payments will go to my BT and leave my purchases gathering interest until I pay off the BT?

Thanks.

Xpheroid

Oh well I have just answered my own question. I read a little more of this site and found Martins warning about this. I have just used the card a little for purchases (£25 or so) but it still will add up I suppose. I can pay it off in three months anyway so it won't really matter as I get three months purchases at 0% as well. Just a shame I can't use it for the whole year.
Never mind. :rolleyes:

Joe_Bloggs

It does read that way. Buy things with another card. It is a common clause that can catch out the unwary.
J_B.

Xpheroid

Joe_Bloggs wrote:

It does read that way. Buy things with another card. It is a common clause that can catch out the unwary.
J_B.

Thanks, well it can't be helped now. I will know for next time.

Joe_Bloggs

I face the same dilemma with a 0% puchase card. All funds on the card are backed up by savings at 4.8% gross. The trouble as I see it is how the 'retailer' treats the payment method. My local authority allows payment of council tax as a conventional purchase. Were any other bill to be treated differently then I would be in the same boat as you for the opposite reason.
It might be worth paying the extra interest based upon the relative amounts involved rather than paying off and starting again.

J_B.

Moggles_2

Best practice is to have at least two credit cards on the go always - one for retail purchases, the other for balance transfers.

Some deals offer 0% on balance transfers and purchase transactions, but they're very much the exceptions!

Xpheroid

Moggles wrote:

Some deals offer 0% on balance transfers and purchase transactions, but they're very much the exceptions!

Well this HSBC card card has 0% for three months so I guess I will just have to decide when the time comes. Or is that the wrong thing to do? I just read somewhere on this site that Martin said:

"Shift too late and the interest cost massively jumps, which quickly chomps away all prior gains."

Does this mean I should definately pay it off just before the three months are up?

Thanks.

Joe_Bloggs

Examine the specifics as they relate to you. Some cards almost defy description in what you can balance transfer and when you can purchsae without incurring penalties. Martin's advice is general. If you have doubts then perhaps others can interpret the terms and conditions for you. They are also probably a mystery to the banking staff that have to deal with them.
J_B.

Moggles_2

Well this HSBC card card has 0% for three months so I guess I will just have to decide when the time comes. Or is that the wrong thing to do?

Unfortunately, this is one of the ways HSBC currently makes its money.

The company lures new customers with a headline-grabbing 0% balance transfer offer for 12 months, knowing that a proportion of those who sign up will forget all about the terms and conditions, once they've got their hands on the new card.

As you know, spending isn’t interest-free after the first 3 months and any retail purchases you make in addition to your balance transfer(s), will sit on the bill attracting interest at the standard rate, until you’ve cleared the balance(s) you shifted from your other card(s).