0% Balance Transfer and 0% Purchases on SAME CC?

lincolnuni

Hi people!

Need a bit of advice to make sure I don't get myself into another debt spiral

I've recently activated a Barclaycard Platinum CC with a credit limit of £3800. It is 0% balance transfers for 12 months and 0% purchases for 3 months.

I used £850 for balance transfer earlier today on an Egg CC that I was getting a lot of interest applied on and have 12 months to pay this back which will be fine.

However, I need a laptop for work and it costs £900. I have £500 cash and was hoping to use the other £400 from the CC and repay it within 3 months at 0% interest? Can I do this?

Also if I do could I just pay for the laptop (£900) on the credit card and immediately after put the £500 cash into the CC so I only owe £400 in the 3 months limit?

Again sorry for the confusion and I really do appreciate any help! )

Shaun

Fruit_and_Nut_Case

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Saints2011

Fruit_and_Nut_Case wrote: »

sallysmith1 is a spammer.

Have marked spam on every post so far

lincolnuni

Anyone got any advice?

Regards,

Shaun

fozmcfc

Firstly it depends what the T&C's say about payments if you are using both the balance transfer and purchases 0% offer. That will determine what your £500 goes towards first.

If it goes towards the 0% offer finishing first (i.e the purchases) then all well and good. If it goes towards the 0% offer that you activated first (i.e. the balance transfer) then it's no good to you.

Hopefully someone with a Barclaycard can confirm this for you.

Also even if it does go towards the purchases first, you might fall foul of some interest on the 4th months statement. There was a thread in the past few weeks about it, but I can't find it.

I'll explain, say your £500 goes towards the purchases and you make payments totalling £300 further, you then make the final £100 payment to complete the payments towards the purchases.

Because you haven't cleared the whole balance completely (BT and Purchases) you will get charged interest on the £850 + the amount you still owed on the purchases.

lincolnuni

Oh I didnt realise that!

Maybe it is not worth it then. I would have thought you could use the moeny towards the seperate offers.

For example, if I wanted to spend £300 as part of the 3 month 0% deal couldnt i just ring them with the £300 before the deadline and advise how I want to use it without it affecting the balance transfer side of things as they are separate offers?

Why offer two different things on the same card if they cant be used seperately?

Thanks again for any help,

Shaun

fozmcfc

They can be used seperately, but you need to make sure how the payments are allocated, you can't choose that, it will be in the T&C's.

Say you make that £900 purchase.

At the moment you will have

£825 Balance transfer balance
£900 Purchase Balance.

IF your payments go towards purchases first, then after the £500 payment, you will have

£825 Balance transfer balance
£400 Purchases balance.

Next month you make a £200 payment, which also goes towards the purchases, so therefore you now have

£825 Balance Transfer Balance
£200 Purchases.

Month after you make a £200 payment, which also goes towards the purchases, so therefore you now have.

£825 Balance transfer balance
£0 Purchases

You then continue to pay no interest on the £825 balance transfer until the end of the balance transfer period.

The problems start if, you don't pay off the full amount of the purchases before the 0% purchase period runs out. It seems from the thread below, you then get charged interest on the full balance (not just the outstanding purchases balance) until you pay the purchases off.

Once the 0% purchase period runs out, then any payments you make will definately go towards the purchase first.

EDIT...The thread I was on about early https://forums.moneysavingexpert.com/discussion/3169116

david39

I thought that the new rules that are now recommended and accepted by all major credit cards (although not legally encumbent on them) meant that payments into your account, in such instances as this, should be deducted from the balance for which the special offer (of 0%) will expire first.

In this case it would be for the laptop purchase so, providing that you pay in enough money to clear that within the 3 month period then no interest will be charged.

Anything paid in extra before the 3 months is up will go towards reducing the balance on the transfer sum.

Beware the wording of the T&Cs regarding when the interest-free period starts and finishes - is it interest free for three months from the date that the balance appears on your account or is it interest free until the date of a specific month's statement? Those are probably two separate dates and if you miss paying it by the required date then interest will start to accrue.

Also note that it will possibly say "until the date of your xxxx statement" which is not the same as the payment-due date of that statement so, again, interest can accrue for that intervening fortnight or so.

thenudeone

david39 wrote: »

I thought that the new rules that are now recommended and accepted by all major credit cards (although not legally encumbent on them) meant that payments into your account, in such instances as this, should be deducted from the balance for which the special offer (of 0%) will expire first.

Unfortunately not.

When there are multiple offers at the same current interest rate (eg: 0%) and which would all revert to the the same standard interest rate, MBNA (including all branded cards such as amazon, play, etc.) allocate payments to the offer which STARTED first, which might not be the one that ENDS first.

Also, if different offers would all revert to different standard interest rates (for example BTs vs Purchases), payments will be applied to the offer which would revert to the highest rate. Again, this may not be the offer which that ENDS first.

The only solution is to pay each offer one day after the 0% offer ends. The the payment will definitely go against the balance which is now at the standard rate in preference to the remaining balances which are at the promotional rates

lincolnuni

So whats the best way to do it?

1. Ring BCard and pay in my £500 cash.

2 Pay for £900 laptop on CC.

3. Make sure I pay £400 into the card before the 3 months is up.

4. When the 3 mnoths is up I will have 9 months to clear the Balance Transfer before the 0% finance deal ends?

---

It sounds simple enough to me but ive been caught out with charges etc in the past and do not want to leave myself open to them again. I could try and ring them but it is sometimes hard to get throufgh to the advisors as a lot of them simply rerad off scripts?

Thnaks for any help,

Shaun

david39

thenudeone:
Sorry to say that you are correct in what you say and that my understanding was wrong. I've checked with the MBNA site and where two separate 0% deals have been taken, the one taken first is the one against which payments are allocated. Also, the customer has no say in the allocation of the payments - it is done automatically.
However, if the newer one reverts to interest-bearing before the older one then, once the interest starts, payments will be allocated to that account instead.

I'm sure that this will be the same for most other credit cards.

I see this as meaning that the OP will eventually pay full interest on anything she puts onto the card as a purchase because that balance will not be reduced in the first three months. The interest will commence three months after the purchase and then the balance for the purchase will come down each month until paid off.