Interest charged on new transaction

jambotam

I have a balance transfer with Natwest, but had to use the card to pay my sons uni fee. I thought you had a certain time to pay before interest was charged, but there is an interest charge of £28 on my statement. Is this correct?

Consumerist

jambotam wrote: »

I have a balance transfer with Natwest, but had to use the card to pay my sons uni fee. I thought you had a certain time to pay before interest was charged, but there is an interest charge of £28 on my statement. Is this correct?

Unfortunately, the payment of uni fees may have been regarded as a cash transaction on which interest is charged from the transaction date until repaid in full.

Bear in mind that normally you only get an interest-free period if you repay the statement balance in full. Unless you pay of your balance in full, including the balance transfer, you will pay interest on any purchases.

As a general rule of thumb, don't use cards with a balance transfer for spending if you want to avoid interest charges.

CLAPTON

you need to read the T&Cs but it's likely that the 'ordinary' interest free period is only available if you pay the full balance each month.

presumably with a balance transfer you aren't doing that so interest will be charged

it is often said never mix a BT card with spending unless your really are sure of the full T&Cs

chattychappy

Consumerist wrote: »

Unfortunately, the payment of uni fees may have been regarded as a cash transaction on which interest is charged from the transaction date until repaid in full.

Not entirely sure if you really meant that the fees could have been regarded as a cash transaction. In general, only cash/cash equivalents/gambling can be treated as such.

I expect it was treated as a normal purchase and then interest applied at the prevailing rate because the balance was paid in full. Ie as per the rest of your post:

Consumerist wrote: »

Bear in mind that normally you only get an interest-free period if you repay the statement balance in full. Unless you pay of your balance in full, including the balance transfer, you will pay interest on any purchases.

As a general rule of thumb, don't use cards with a balance transfer for spending if you want to avoid interest charges.

Yep that's the rule (though there are some situations where it's better to spend on a BT card). At least in the OP's case, repayments will be applied to the university fees first so that the amount of interest will quickly diminish.

jambotam

OK guys, thanks for that. Should have read the T&C's. I just thought you had a month or so before interest was charged. My intention is to do another balance transfer for the whole sum outstanding and I thought I could do it without having to pay any extra. Oh well, it's only £28, not a huge sum in the overall scheme of things!

Consumerist

jambotam wrote: »

OK guys, thanks for that. Should have read the T&C's. I just thought you had a month or so before interest was charged. My intention is to do another balance transfer for the whole sum outstanding and I thought I could do it without having to pay any extra. Oh well, it's only £28, not a huge sum in the overall scheme of things!

To minimise further interest charges, pay off the uni fees and interest charges as soon as possible; you are still paying interest charges on these amounts every day.