Interest when spending on a balance transfer card.

SVRich

I'm a little confused about this, I have a Barclaycard with 30 months interest free on balance transfers and 6 months on purchases. It says on this site that if you don't clear the whole debt you get charged interest even if you have cleared the debt from the purchase (as I believe you would pay that first). And Barclaycard say:

"If you have a balance transfer you will pay interest on all purchases made once the 0% purchase rate for 6 months has expired, unless you repay your entire balance in full each month"

How does this work exactly? do you pay the interest on the total purchase amount every month until the total balance is paid? If so what is the point of saying you pay the most expensive debt first?

Thanks.

[Deleted User]

Yes - you'll pay interest on the purchases until there are cleared, as you won't have cleared the balance in full.

The point of it clearing the most expensive debt first is so that it doesn't clear the 0% and leave the higher purchases sitting there, as in the olden days.

So you may want a separate card for purchases if you plan to clear in full each month.

~Chameleon~

What happens if you pay off all the purchases before the 0% ends leaving the remaining BT amount at 0%. Would this not work?

[Deleted User]

You balance will then all be at 0% again, so no interest.

Cycrow

Say you have £1000 at 0% BT, and £500 from purchases, you will pay daily interest on that £500 until thats been cleared. the £1000 will remain interest free

also, as you wont have cleared the balance in full, any new purchases added will have interest on them from the day they are added until the day they are cleared.

globetraveller

There are so many options these days that it is far easier to use your card for the balance transfer only. Get another card for interest free purchases. You will get recommendations on here. Cc companies don't want you to go through the whole term without paying anything extra so they confuse you with additional offers.

SVRich

Thanks for the replies.

So the purchases would be paid off first and I wouldn't pay any interest once they are paid off but until they are I will?

I was just confused by this quote from this site (I would post a link but I am not allowed yet):

"Spend on a 0% balance transfer card and any repayments will go towards the spending first. But you only avoid interest if you pay the balance on the card in FULL. So, even if you pay off the purchases fully, you'll still pay interest on them."

But I guess I was being dim.

Another question, would the six months of payments go against the purchases or the balance transfer as at that point they are both 0%

[Deleted User]

Check the t&cs. Some put payments against the one that started first, or the one that finishes first, or that one that will go to the highest rate. Can't recall what Bcard do.

~Chameleon~

Barclaycard pay off the highest interest bearing balance first and in the case of more than one at 0% they pay off the one that ends the soonest.

SVRich

Thanks all, I have actually applied for a M&S card with months on purchases that I haven't had a response from yet which I will use if I get it but it is good to know that it will get paid off first on the Barclaycard if I don't get it so interest will be minimal.

Cycrow

SVRich wrote: »

"Spend on a 0% balance transfer card and any repayments will go towards the spending first. But you only avoid interest if you pay the balance on the card in FULL. So, even if you pay off the purchases fully, you'll still pay interest on them."

Basically it means avoiding interest all together.

With the balance transfer on there, you will pay some interest on any purchases. The interest will be up to the point you pay them off, and will only be on the balance that is not at 0%

Whereas, if the card was paid off in full each month, the purchases could be on there for a month and no interest would be charged