Tesco Credit Card payment allocation problem.

TWDave

First time poster long time reader. I am hoping to get some opinions on a problem I'm having.

I have a Tesco Credit card that I used until recently for all my spending paying it off in full at the end of every month. A couple of months ago I was offered a 0% balance transfer deal. I knew that if I was to take this and then carry on spending I would incur interest. However as I had debt on other cards that were incurring higher interest amounts I decided to take it but pay off the purchase amounts as soon as they appeared on the account. I was confident this would work as payments should be allocated to the higher interest amount this should have meant that my interest each month should have been around £2 as the APR is 15.9% and the average amount outstanding would not get above about £100. So I Balanced transferred £5000 and every day checked my account and paid any purchases off that took my balance over £5000. I made about 20 payments through the month.

However I have just received a credit card statement that showed that my balance is still roughly £5000 (as expected) but my outstanding Balance Transfer balance is £3,200 and my outstanding purchase balance is £1,800. This is because there is a T&C that I have only just noticed that says that payments are allocated to the higher interest rate but only once they have appeared on a statement meaning that I can only pay off the purchases after my statement is generated. This means that I have now incurred closer to £20 interest and am regretting taking the Balance transfer.

I tried to research the credit card code that states that payments should be allocated to the highest interest balance to see if the pre-statement loophole is something I can challenge. I can’t find anything other than a citizen’s advice bureau leaflet that states that payments are allocated to the balance with the higher interest. I intend to phone the financial ombudsman to discuss whether this element of Tesco’s T&C is legal. I can’t do this till Monday now. Tesco says I have to write to them to challenge a T&C, I can’t do it by phone.

Was anyone else aware of this loophole that credit card providers use? Do you think I have a chance of challenging this or should I just cut my losses and move elsewhere?

Grateful for any thoughts.

Gromitt

This is exactly why sites such as this one clearly state "Never use a balance transfer card for purchases".

The "statemented transactions" clause isn't exclusive to Tesco, and was stated before you took out the BT.

You can argue the T&Cs with Tesco, but I don't think you'll get anywhere.

Cut your losses, transfer elsewhere and use a different card for purchases.

Cell

I got caught the same way with Nat West.

Once the good people on here helped me with my query I read the terms and conditions, understood where I'd gone wrong and moved on.

fozmcfc

This is the case on many credit cards, but some will use payments towards amounts which haven't appear the statements. This was pointed out on a similar thread to this one last week.

As others above say, you probably won't get anywhere, but I guess no harm in trying.

You need to write, because you'll need to go via their complaints procedure, with everything documented.

The ombudsman will not be interested in looking into your case, until you have exhausted the complaints procedure of Tesco. However, they may give advice as to whether you should challenge Tesco and if Tesco say hard luck, whether they then would take up your case.