Warning:Careful paying back early on Barclaycard

glawster_2

I went on holiday and the foreign ATMs threw a wobbly at my bank card. Stuck for cash I did a cash withdrawal on my Barclaycard for £900. The interest rate for this is around 30% plus a fee so it's not cheap but it was all I could do. On returning to England I transferred the £900 onto my Barclaycard straightaway from my bank, so that the cash advance was on there for about 10 days before being paid off. Or so I thought. B

However what happened when I looked at my next statement was that the £900 was used by BC to reduce a 0% balance transfer balance rather than the cash advance at 30%. Something similar happened before but it was a small amount repaying at the standard purchase rate so I let it slide.

I called Barclaycard and they said they'd fix it, but it takes 5 days (more interest?) and I'll have to wait and see if they do.

The problem seems to be that if you repay a cash advance or standard purchase that you did/made on the current statement BEFORE the next statement is produced then the money will pay off the highest interest on the PREVIOUS statement, rather than the highest interest on the account. This is a problem that may be hitting other people. Anyone with similar experiences and should BC be allowed to do this? On top of what the t&cs say I thought there was a change in law/banking code that meant they always have to pay down the highest interest charges from any payments made. BC clearly states that


'If you do not pay the total outstanding balance in full by the payment due date, we will apply the amount you do pay to reduce the higher interest rate balances before lower interest rate balances.'

So watch out for this if you need to do something similar

electrobix99

I think it only applies once the statement is produced.

dzug1

I suspect Barclaycard is not the only one that does this

jonesMUFCforever

How did you manage to get £900 in one go?

Ben8282

Yes, Barclaycard have acted correctly. Payments will always be applied to the billed balance before being applied to unbilled charges. You should have waited until your statement date.

nick74

jonesMUFCforever wrote: »

How did you manage to get £900 in one go?

Over a bank counter rather than at an ATM? I assume its still possible to draw cash over the counter with a credit card, although it must be about 20 years since I last did it!

InsideInsurance

Some cards allow large cash withdraws from ATMs, HSBC premier cards allow £1,000 a day.

nctmum

There was a Which? article called "Play Your Cards Right" recently that mentioned that some providers only mark payments against statemented balances, and some do it against current. I think there was a mixture of providers mentioned.