Positive Payment Hierarchy and paying off purchases before statement issued

michaels

I have a Barclaycard with a nicely stoozed 0% BT balance.

I have converted it to a cashcack card to take advantgage of the 6% intro offer.

Having done my 15 transaction (14x£1 1x£1100) I waited until the purchases showed on the online transaction list then paid off the purchases to try to make sure I was not charged any/minimal purchase interest.

However Barclays have credited the payment against the BT rather than the purchases claiming this is because I made the payment before the statement with the new spend had been issued and thus the new spend balance was not 'due' and therefore any account credits would be made against the BT balance. This leaves me with a reduced stooze balance and needing to make another £1100 payment to avoid (hopefully)paying any credit interest.

My understanding was that under the positive payment hierarchy all credit card companies were supposed to have introduced payenets should automatically to go the most expensive items and thus the payment should have gone against the purchases. Any one any info/experience of this? With a card with a BT offer can you spend and pay off the full spend balance eacjh month to avoid interest charges or does the fact that there was a balance at the previous statment date mean that you always end up paying interest on sepend even if you pay it off in full by the due date?

[Deleted User]

It's standard. Most cards apply payments to highest rate first only if they have appeared on your statement. Appearing on online transactions isn't enough.

So if you mix a BT with purchases, you will always end up paying interest on the purchases.

dalesrider

michaels wrote: »

because I made the payment before the statement with the new spend had been issued

My understanding was that under the positive payment hierarchy all credit card companies were supposed to have introduced payenets should automatically to go the most expensive items and thus the payment should have gone against the purchases.

Any one any info/experience of this??

They are correct. If you make a payment prior to the statement being produced. It is considered a payment towards your outstanding balance of the previous statement.
Had the next month statement been produced then, as you say the payment would go towards the highest interest 1st. As it was not it goes towards the balance....
As no statement had been produced, there was no interest due anyway, as you had paided the due balance (less bal transfer) already.

Moral of the story is stop using a credit card like a debit card and only pay after a statement has been recieved and before the due date.

michaels

dalesrider wrote: »

They are correct. If you make a payment prior to the statement being produced. It is considered a payment towards your outstanding balance of the previous statement.
Had the next month statement been produced then, as you say the payment would go towards the highest interest 1st. As it was not it goes towards the balance....
As no statement had been produced, there was no interest due anyway, as you had paided the due balance (less bal transfer) already.

Moral of the story is stop using a credit card like a debit card and only pay after a statement has been recieved and before the due date.

(Off topic - with Aquacard credit limits you get used to using a credit card as a debit card...)

However I managed to get Barclaycard CS to resolve this to my satisfaction. The problem with waiting for the statement to be produced is that with an exisiting BT offer on the card there is no 'interest free' period for purchases as this only applies if the card is cleared in full on every statement period so as soon aas you lett a purchase balance reach a statement point you pay interest.

I susccessfully argued with an English first language CS person that when I switched my platinum card with an existing BT offer (stoozed of course with a good will payment covering the BT fee as otherwise I was going to close the account ) to being a cashback card I asked about whether I should get a seperate cashback card but was advised that I could keep the existing BT offer and take advantage of the 3 months 6% cashback offer alongside this if I converted my card to a cashback one. So to resolve the issue they have credited my account to equal the max CB for the first 3 months (another 60 quid not yet earned) and reset my BT balance to what it was before I made the payment. Sweet.

(I am now left with running out of good CB options as we have nearly done the 3.3k of DWs aquacard and mine doesn't reset for a couple of months, neither of us is due a new Amex yet and all of a sudden I have finished the barclaycard offer - perhaps it is time for DW to explore doing the Barclaycard cashback card, she has a former Egg BC that might prove an ideal no credit search starting point, just have to get her to call up looking to cancel so retentions offer her a £50 bung whilst changing the card type)