Paying off Balance Transfer on 0% purchases/BT card

imemapp-241

Hello,

Apologies if these questions sound ridiculous but I'm a little confused about switching to a 0% BT/purchases card.

I have one credit card and planning on transferring £1,600 from this card to a 0% BT/purchases card. Normally I pay off my statement balance in full. However, coming up to Christmas (and a few other spanners in the works) means this may not be possible for a few months. I would ideally like to transfer my balance to a card that offers both 0% on the transfer and new purchases (prob Sainsbury's or Halifax).

Now, my question is, how do I ensure that I am paying off my balance transfer AS WELL AS new purchases so that, when the 0% term runs out, I don't end up paying interest on the balance transfer? I know that sounds like a silly questions, but I can't get it right in my head - each month I would normally pay off the statement balance, but that doesn't mean that the card balance is £0. So, is it as simple as diving the BT by say 12 (12 months) and paying that additional amount on top of each monthly statement?

Many thanks for your help!

imemapp-241

Also, I know I could transfer the balance while continuing to use my current card while paying off the BT card. But, I'm anticipating a few big spends at the start of the new year and would like the option of having a card with 0% purchases. And, the Sainsbury's card offers Nectar points

Nasqueron

With a 0% balance transfer card (or 0% purchase), as you do not accrue interest any payment (even just the minimum) reduces the outstanding balance - so you could (rough maths) divide the balance transfer total by the number of months it runs for and pay off that amount each month. Alternatively you could pay the minimum and save the extra in a savings account / ISA so you earn a paltry bit extra and then pay it off at the end.

I think it's probably better to separate the balance transfer and purchases (unless you get a 0% BT and purchases in one deal) and concentrate on paying off the shortest deal first - just ensure that you have funds to pay them both off

As an example, somewhat related, I have around £5000 on a BT card which I did as an interest free loan to buy some stuff I wanted. I pay around £98 a month minimum payment, over a 33 month period - it means that I will pay off about 75% of the total just in minimum payments and leave me with about £1300 to pay off at the end.

Hope that helps.