Credit card interest question

blitzboy

Hi all,

Just a quick question regarding interest on my barclaycard.

I currently have an amount that i transferred across to my barclaycard on a long term 0% deal. I have an urgent purchase that i need to make today and wont have enough funds to cover it in my bank until i am paid in a couple of weeks.

Am i right in saying that under the new laws I am able to make the purchase of around £200 on the barclaycard and pay that off when i get paid interest free? Or will the payment be assigned to the current 0% deal and the £200 remain as interest chargable every month?

Thanks in advance

Ben8282

The purchase will not be interest free as you do not repay the full balance every month. I believe that, so long as you wait until the purchase has appeared on a statement, the repayment will be applied to the purchase and you will be charged interest on the purchase from date of transaction to date of repayment. You must not pay off the purchase until it appears on a statement.

thenudeone

When you make the payment it should be assigned to the balance that carries the highest interest rate.
In most cases that is decided by the balances on the day the payment is made but I believe one or two cards will apply a payment to transactions on the last statement BEFORE more recent processed transaction that haven't yet appeared on a statement, even if the statement balance is at a lower interest rate. IMO That approach is a breach of the guidelines which were meant to reduce consumers' interest charges caused by an adverse payment allocation.

So you may wish to wait until the transaction appears on a statement before paying it off, to make sure that you are paying off the interest-bearing balance.

Regardless, however, you will still have to pay interest on the purchase between the purchase date and the day you pay the purchase off. Purchases are only interest free if you pay off the full statement balance (not just the purchases) and have done for the previous month as well.

So it is always better to keep new purchases on a separate card if you can, because there will be no interest to pay if you pay it off within 2-3 weeks of the statement.

blitzboy

Thank you for your replies. I realise it wont be interest free completely, i just didnt word it correctly. My main concern was having to pay interest on the £200 for the remaining 8 months of the 0% deal but thanks for confirming my suspicion that this would not be the case :-)