Balance Transfer

This enquiry relates to my Virgin Credit Card

In January 2010 I opened a new Virgin CC account, and made a balance transfer of amount "X" on to it, the interest free period on that balance transfer expires in April 2011

In May, they were offering interest free on purchases, I made one purchase of amount "Y", and the interest free period on that offer expires in Feb 2011

  • I have not used the card for any other transaction,
  • So far I have not been charged any interest.
  • Iam doing reasonably well paying off the balance (I am paying off about 4 x the minimum amount each month)

Taking stock of where I am now... I accept I may not have the entire balances paid off by the end of the two offer periods, so may have an amount on which thereafter I will be charged interest.

Considering all the above, I am interested in advice since they are now offering a new deal of interest free balance transfer to November 2011, I have one other credit card with a balance "Z" on it, which I am thinking of transferring to Virgin to avail of that offer.

I asked virgin (using their call centre which i think is in Ireland), how payments I make are allocated against the balances on the card, and the answer surprised me.

"any payment you make is automatically made against the balance accruing the most interest"

This surprised me because I thought the payment would be used against the oldest balance first, which in this case won't be the same thing.

Oldest balance "X" is interest free to April 2011
a newer balance "Y" is interest free only to Feb 2011

so what interest will I be paying from March onwards, and then from April onwards if some of whats on the card is not paid off, and if I have a new third amount "Z" on the card which I am thinking of doing now (0% until Nov 2011).

Advice please


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