Nationwide CC allocation of payments

mycvattached

Hi everyone,

Just want to share some information about Nationwide credit card payment allocation. As we all probably aware at present payments should be allocated to the most expensive part of you outstanding balance. So if you have £1000 0% balance and £1000 21% purchase rate than money should go towards the purchases.

However this is what happened to me. I applied for a Nationwide CC and made a long term balance transfer at 0%. After about a month I had to make a big purchase and decided to buy on Nationwide CC and than transfer balance from another card (RBS) at low % assuming that payment will fully settle a purchase on my Nationwide CC. Therefore I made a purchase and waited 5 days until this amount appeared on Nationwide CC. Because RBS offer was due to expire I made a balance transfer and thought that things are sorted.

When i received my statement i was really surprised to find out that payment was allocated to settle my 0% balance transfer rather than 21% purchase rate. I phoned nationwide and they said that I had to wait for the statement first and then to make a balance transfer. Otherwise their system does not "understand" the calculations. So i ended up paying BT fee plus normal 21% rate for the purchase.

I hope this info helps somebody to understand CC logic.

rb10

That's fairly standard across credit cards, not just Nationwide.

Payments will initially go towards transactions that were showing on your last statement. Within that, they'll be used against the most expensive first.

Then, once your last statement balance is cleared, any further payments will go towards more recent transactions. Again, they'll be ordered from the most expensive first.

chattychappy

Yep, a useful reminder. It is standard practice, though not universal.

It is also an issue for people who use cards such as Santander Zero for ATM withdrawals overseas. People minimise interest making the withdrawal and then immediately sending payment by internet banking. That's fine if the card is reserved for just those withdrawals. If, however, there is an outstanding balance from the previous statement then that would have to be paid off at the same time else payment sent would be applied to this balance first.