BT and 0% spending card - paying off which one? Help!

JayN

Hi guys,

I am a newbie to this forum but a long time lurker! I am new to credit cards and may have done something really stupid. I am confused by the process and was wondering whether someone can help me.

I have a question about a credit card that I have recently obtained. The perks of the card were a 24 month balance transfer and 0% spending for 6 months.

Now, I transferred £700 from my old credit card to this new one (with a credit limit of £1900) with the hope of paying it off in instalments over the 24 month period. However, I believe I may have put a spanner in the works. My available balance was £1200 but needed to make a payment of £1900 (I could only make payment on one card only). So I transferred money (£1000 - just to be sure) into the credit card to put it 'in credit'.

Does that mean I have to repay the £1900 (the transaction amount) within the 6 month period even though I attempted to put the credit card 'in credit'? And then the BT amount after in instalments?

I am simply confused at the process - I attempted to put money into my credit card to put it 'in credit' but then spent money on card. Basically I've done it other way round.

Any comments and/or thoughts will be very much appreciated.

Thank you.:)

redpete

I suspect that the credit of £1000 would pay off the £700 debt and so the card would then be £300 in credit and you have wasted 24 months nearly-free borrowing.

You have now spent £1900 resulting in a £1600 'purchase' debt with the CC which you will have on 0% for 6 months.

But best to contact the CC company to clarify.

(CCs don't like credit balances - in some cases I believe they aren't counted as 'available' for use, only as a refund - so putting a CC in credit so you can spend more than the limit is not recommended and sometimes not possible.)

JayN

Thank you redpete.

I will give them a call to explain!

pqrdef

They don't show this on your statements, but basically they have a bunch of pots. At any given time you have separate running balances for purchases, cash advances, BTs, interest/charges, and promotional offers, each with its own interest charging scheme.

Any money you pay in is allocated between the pots according to a set of rules, and you have no control over this at all. You don't get to choose.

A promotional BT would tend to be at the back of the queue, but if that's all you had on the card, that's where £700 of your £1000 went.

In-credit is always last in the queue. You can't have a credit and a debt at the same time, so all the pots will be cleared before any excess cash appears as a credit balance.