Balance transfer and interest advice

Steve.dix

Hi hope you can give me some answers.

I have just taken out the Virgin Atlantic white card and transferred £500 onto it from my old credit card at 0% for 6 months (on balance transfers)

If I were to now use the card for purchases would I incur interest on this, even if I pay off more than the total sum of purchases each month?

So for example if I spend an additional £40 on the card each month but pay off £140 each month, would I incur interest on these new purchases or does the credit card company pay these off first followed by reducing the balance transfer debt.

Sorry its confusing, I hope I've tried to explain it ok.

[Deleted User]

Both. The payment will go to the purchases as the higher rate balance but you will pay interest on them as you are not clearing in full.

Steve.dix

Hi thanks for your reply.
So basically il pay interest on the full amount not just the additional purchases even though it's 0% interest rate for 6 months on balance transfers? Can understand that I might have to pay interest on the new purchases but not on the full amount including the BT.

Then should you not use the card for purchases in order to not have to pay interest on the full amount?

Sorry if I'm sounding a bit thick!

[Deleted User]

You pay interest on the full amount, but at the prevailing rates. So you pay interest on purchases at your purchases rate (let's call it 20%) and interest on your BT at your BT rate - ie 0%.

Nebulous2

It's generally not recommended to mix purchases and BTs on the same card. Use a separate card for purchases and pay it off every month to avoid interest.

Twiggy_34

I could be wrong, but I thought that the highest costing amounts on the balance are (?nearly) always cleared first. So if the BT amount is £500 and you use the card for a £40 purchase, so long as you pay off at least the £40 purchase amount with your next payment you will be left with the balance to which the 0% interest applies?

YorkshireBoy

Twiggy_34 wrote: »

I could be wrong

You are.

but I thought that the highest costing amounts on the balance are (?nearly) always cleared first. So if the BT amount is £500 and you use the card for a £40 purchase, so long as you pay off at least the £40 purchase amount with your next payment you will be left with the balance to which the 0% interest applies?

You only enjoy up to, say, 56 days interest free on purchases if you pay your statement in full (and have paid the previous statement in full). You won't be doing that with a 0% BT on there, so your purchases will accrue interest almost from the time you enter your PIN.

Steve.dix

Thanks for the advice, really appreciated!