Credit card paying off enquiry

Shack_attack

Hi,

Apologies if this has been covered previously.

If you have a credit card with credit on a partial 0% balance and the rest being charged on an APR'd balance and you want to pay it off, can you decide to pay off the amount which is costing you more, or is it based on when that amount was put on the card and works backwards?

Thanks,

grumbler

More expensive part of the balance gets paid off first automatically.

Bartelmy

Yep. I work for a credit company and payments are automatically allocated to the most expensive part of the balance first. General, cash, purchases, BTs, 0%s. If you have any fees (which you won't, since you haven't lost your 0%), they'd be earning the same APR as purchases.

NICOLAWB

So If i have a balance on a credit card at 0% until nov 14 and I have an offer on same card of BT 0% for 12 months until feb 15 and I transfer a balance over. Could I pay off the original amount once the 0% offer ends in nov 14 so still carrying on 0% on second BT until feb 15?

Bartelmy

I'm not sure how payments would be applied while it's all still on 0%, but as soon as one comes off, payments will go to that first. So you'd still get one months worth of interest, but no more.

Cell

NICOLAWB wrote: »

So If i have a balance on a credit card at 0% until nov 14 and I have an offer on same card of BT 0% for 12 months until feb 15 and I transfer a balance over. Could I pay off the original amount once the 0% offer ends in nov 14 so still carrying on 0% on second BT until feb 15?

Once the new BT was put on a statement usually payments continue to be deducted from the BT that expires first. Assuming you clear that before the due date in November then any further payments will come off the second BT.

The opposite situation can occur if you have a second BT which runs out before an existing one. Payments (once statemented, but not before) would divert from the original BT to the new one as it expires first.

thenudeone

Cell wrote: »

The opposite situation can occur if you have a second BT which runs out before an existing one. Payments (once statemented, but not before) would divert from the original BT to the new one as it expires first.

Not necesserily.

If several parts of a balance are at the same (eg: 0%), then a card company can allocate payments between them however it likes (subject to T&Cs).

In these circumstances, mbna used to (and may still do) pay off the 0% offer which began soonest, which may not be the one which ends soonest.

Cell

Ahh, fair enough. Need to check T&Cs as you say.