Interest free balance transfer and purchases offer - how does the interest work?

sc0ttb

Hi
I got a new Virgin credit card from MBNA with a 16month interest free on balance transfers. So I transferred £3500 on to it but there is also 0% on purchases for 6 months. My question is, if I use this as my work credit card as well i.e. for expenses which are reimbursed and clear the new purchases every month, when the 0% on purchase rate runs out will I start getting charged interest? I guess what I need to know is the money I pay off each month, does it go off the purchases or the balance transfer amount?
Many thanks

Tixy

You could use the card for purchases in the first 6months, repaying in full the following month.
After the 6months if you did that you'd be charged interest on the purchases each month (as you won't be clearing the whole balance on the card in full so don't qualify for the "up to 56days interest free").

thenudeone

MBNA have a nasty trick up their sleeve (easily solved, though).

Say at the end of the 6 months you had a £1000 balance on purchases and £1000 on balance transfers, both at 0%.

If you pay £1000 off on the last day of the 6 month deal, MBNA would apply the payment to the balance which will be charged at the highest standard rate at the end of the introductory period, i.e. to the Balance Transfers (for which the standard rate is 16.6% pa) and NOT to the purchases (for which the standard rate is 15.8%).
From the day after the offer ends, you will then be charged interest on the purchases for the next 10 months!

This is explained here: http://uk.virginmoney.com/virgin/credit-cards-v28/popup/summary.jsp

This is easy to avoid as long as you understand it.
Just wait til the day AFTER the 0% on purchases offer ends before paying the purchases off. Then the payment will go towards reducing the purchases balance, leaving the balance transfers to go on for another 10 months at 0%.

thenudeone

Tixy wrote: »

You could use the card for purchases in the first 6months, repaying in full the following month.

This wouldn't work - see the T&Cs linked above for an explanation of why.