Balance Transfer - Purchases question

richymtfc

If I have an 18 month 0% Balance Transfer card, which also has 0% for 6 months on purchases, after that 6 months, do you just pay interest on any purchases made after the 6 months, or any purchases made on the card full stop.

e.g.

Balance Transfer £1000
2 months in: Buy a TV for £200
8 months in: Buy a DVD Player for £200

After 6 months would I have to pay interest on the £200, or just start paying interest after 8 months?


Thanks

scottishblondie

Any purchase balance on the card will accrue interest from the day the 0% runs out, regardless of when it was purchased.

YorkshireBoy

After 6 months you'll pay interest on any and all purchases balance.

In practice, this means you'll always have a small amount of interest charged on each statement (until you clear the full statemented balance, including the BT, for two consecutive months).

You can minimise this by paying the full purchases balance the day after statement date (but you still won't be able to avoid residual interest altogether). Not a major problem if it's pennies, however many card providers have a £1 minimum interest charge.

Much better to keep BTs and purchases on separate cards.

richymtfc

YorkshireBoy wrote: »

You can minimise this by paying the full purchases balance the day after statement date (but you still won't be able to avoid residual interest altogether).

So any payments to the card go off the purchases first, and the balance transfer last?

e.g. Using that example above, if I paid off £200 after that 6 months, I'd be interest free, because I'd only have my Balance Transfer left?

YorkshireBoy

richymtfc wrote: »

So any payments to the card go off the purchases first, and the balance transfer last?

Payments have to be applied to the highest interest rate (of statemented) balance first.

e.g. Using that example above, if I paid off £200 after that 6 months, I'd be interest free, because I'd only have my Balance Transfer left?

Not totally interest free. Read my first reply again.

richymtfc

Understood. Thanks very much for your help. Signing up to two cards (BT and P) as you previously suggested.