Two Promo Rates on One Card

Vickilo

Hello everyone,

I was hoping for some advice please.

How would it work if you opt in to a new promotional rate on a credit card with a promotional rate already currently in use?

For instance:

If the card had a £1000 balance transfer already made on it which is 0% until May 2012

and today I opted into a new promotional rate eg. 0% on money transfers until July 2012.

Am I right in understanding that provided the full balance is paid off on the card by May 2012, then no interest will be charged?

Would any payments go towards the full balance rather than the debt being treated as two distinct balances, as i understand that that payments go toward paying off the highest interest rates first.

Thank you in advance

YorkshireBoy

Vickilo wrote: »

I was hoping for some advice please.

Then you'll need to divulge the card/card provider, because otherwise all you'll get is speculation and opinion.

Am I right in understanding that provided the full balance is paid off on the card by May 2012, then no interest will be charged?

Yes.


EDIT: With you mentioning money transfers, is it an MBNA/MBNA run card? If so, then condition 2g (2nd bullet) - in the current online T&Cs - says that they'll apply payments to the promotional offer with the earliest start date.

Vickilo

Thanks for the response,

It is a virgin credit card, so yes MBNA.

splatt30

I currently have 5 seperate 0% rates running on my virgin card. Payments are now applied to the promotion which started first. The statements now detail exactly how much you owe on each promotion to make it easier to keep track. You can clear the one promotion by the may statement date and keep the rest going until july.

Vickilo

Ok, so sorry to sound confused, but to verify;

The money paid will be allocated by the CC provider, but you wouldnt lose out or default on a 0% promotional rate simply because the money paid hasn't gone specifically towards one specific balance with a specific promo rate?

I really appreciate the help, thank you.

splatt30

Provided you pay the mi imum each month your within the rules. I keep a close note of when they finish and make an additional payment to clear just before the promotion ends (provided this is the one that started first). If you get caught with a promotion ending when another is still running which started first, you need to pay the day after it has ended. This works because the rules state that payments are allocated against the balanxe with the highest interest. Ie once the promotion is finished and it reverts to svr payments will go toward it, and not the other promotional rate. In this way I make use of the 0% on purchase offers too. Keeps more money offsetting my mortgage

bouncydog1

Suggest you monitor using a spreadsheet with a column for each amount and the date the 0% ends at the top. As you make a payment subtract it from the deal with the earliest start date - simples!

thenudeone

splatt30 wrote: »

I keep a close note of when they finish and make an additional payment to clear the balance which is about to finish a couple of days beforehand. In this way I make use of the 0% on purchase offers too.

This will not always work. It depends on what the start and end dates on each offer are. If you pay just before an offer ends but that offer is not the offer with the earliest START date, then the payment will not be applied to it, and you will start being charged interest on it even though you thought you had cleared it.

Better to pay 1 day AFTER the offer ends. you may pay a day or two interest but the payment will definitely go against the right balance.

splatt30

Thenudeone - you're right.
Virgin changed their rules a while ago & i nearly got caught. Mine are now all finishing in the same order they started so this works for me. But I agree you need to keep a close eye.

This isn't really a game for the poorly organised! But I'm pretty OCD on this front and it lets me stooze against my mortgage which unfortunatley is fixed at 5.98%

thenudeone

splatt30 wrote: »

it lets me stooze against my mortgage which unfortunatley is fixed at 5.98%

Sorry for that. it's not worth stoozing on my offset mortgage which is a grand 0.5% above base rate _party_, but with the right BT offer it can just about break even with a 3.5% ISA.