0% Bal Trans & 0% Purchases - A bit of help please!!!!

thenudeone

Be VERY careful exactly when you pay off the amount to cover the purchases.

The rules state that a card company must always apply payments to the part of the balance with highest current interest rate.

BUT - If two parts are both CURRENTLY at the same rate (eg: 0%) then the card company can choose which to apply it to (as long as it's in the Ts and Cs)

So if you pay the remaining balance of the purchases just before the purchase 0% offer expires, the card company could use the funds to pay off the balance transfer, leaving the purchases to start being charged interest in a few days when the 0% on purchases expires.

Unless you are absolutely sure how payments will be applied (and I have been misinformed on this issue by call centre staff before) it is always safer to wait until 1 day AFTER each 0% offer expires, then you can be sure it will pay off the part you want.

MoneyMac

Thanks

But surely say for arguments sake i pay of the full total of all the purchases i have made in full say 1 month before the 0% on purchases ends then i am left with the BT balance i am safe, aren't i? Obviously i will only be making minimum payments to start with so if i total the minimum payments made then make it up to the full amount of the purchases and pay it like i say the month before the 0% ends no interest should occur surely? Is that correct?

MoneyMac

Just to add it says in the agreement i have:-

Application of Payments - We will apply payments to debt bearing the highest interest first and, subsequently, to debt bearing lower interest rates in a high to low interest rate order. We will apply payments in this order, first to debt shown on your current statement and then to any debtwhich has not yet appeared on your statement.

So after the 0% for 12 months on purchases and the 0% for 26 months on Balance Transfers both rates then become 19.9%.

So will i be ok if i do as i suggested on my previous post?

Still a little confused!!!

MoneyMac

Just spoke to the Credit Card provider and they said the payments made now each month come off a bit of both as it is one balance but once the 0% puchases for 12 months is up it allocates payments to the highest interest part first which becomes the purchases as that expires first and becomes 19.9% before the BT part which still would have another 14 months to run at 0% so she said it will show on the statements, but nearer the time of the actual date the 0% on purchses is up to give them a ring and ask how much of the balance left is purchases and to clear that amount completely on that date as not to incur any interest.

So clears that up for me, just need to be on the ball in 12 months time:-)!!!