Santander Zero payment allocation

garfy_99

Hi All,

I have a Santander Zero card with an outstanding balance made up of a mixture of 0% balance transfer, cash withdrawals and purchases.

I asked them on the phone how any payments would be allocated and they said that the payments would be allocated "to the whole of the balance" and that it would be allocated to the balance attracting the highest interest rate first. However they couldn't explain what "whole of the balance" meant and told me that it would be impossible to pay off just the items attracting interest (cash and purchases).

I asked them to confirm this in writing.

In the letter they have put "All transactions on your account will require a percentage of the payment receive whether they are interest bearing or not", but then goes on to say that "payments are allocated to the balance which accrue [sic] the highest rate of interest first.

I'm confused about the "whole of balance" and the idea that all transactions will require a percent of payment received and this does not seem to be stated in the T&Cs anywhere.

Can anyone explain what they are getting at?

Thanks,

Simon

chattychappy

Oh why can't banks write stuff that makes sense? Having said that, Zero is a great card and I use it all the time to get cash overseas.

This is my understanding:

Payments are allocated in the following order:

1) Statemented transactions, starting with those attracting the highest interest rate first.

2) Unstatemented transactions, starting with those attracting the highest interest rate first.

I don't have my T+Cs to hand, but you can see them for CCs they are currently offering at: http://www.santander.co.uk/csdlvlr/ContentServer?c=SANDocument_C&pagename=WCSUKPublicaLte%2FSANDocument_C%2FSANDocumentPreview&cid=1324575544362 and I'm pretty sure it's the same for Zero.

(It opens a PDF file, look at para 7 on page 7)

I struggle with what they have told you. Perhaps the "percentage" thing is saying that where you have a group of transactions in the same category, then payment is applied equally among them. Eg if you had two purchases of £100 and made a payment of £100, then they would allocate £50 to each of the purchases. (Not that it would matter in most cases.)

I have had the same "mix" as you in the past. Once you have a promotional balance running, you can't pay off your cash advances until they have hit your statement. (If you try, the money is allocated to your BT deal.) Ditto purchases. So the best you can do, is make your payment just after the statement date*. If you can time your purchases/cash transactions just before the statement is generated, this would minimise interest. Most here would say it's best not to mix transactions with a balance transfer. But in some cases it can make sense, particularly if you have something like Zero and are using it to get foreign cash. (You could consider applying for Halifax Clarity as an alternative.)

(* because of this, you might want to cancel any DD you have and pay manually. If you wait for the DD to happen you will pay unnecessary interest. There will be howls of protest here at such a suggestion because the risk is you forget to make a payment and lose your BT deal. The choice is yours!)

Dobbibill

Hopefully someone more knowledgeable will come along shortly and advise you but from what you've said, I would understand it to mean..... you will be charged interest on your purchases (unless it 0% for purchases as well as BT) and also interest from the date applied for any cash withdrawal. If the amount you pay off was more than both of these put together it would reduce you owe on the BT amount. So overall being applied to the total balance after interest is applied.

I could be wrong here but this is how I would read it.

DB