Balance transfer fee treated as purchases

Bisoy

Hi guys,

I've just received my RBS and Natwest 1st statements and noticed that the balance transfer fees were treated as purchases. It says that intro purchase rate expires in Oct. I've already set up a DD for a minimum payment each month. How can I avoid paying interest on purchases? Do I need to make an additional payment for the BT ( treated as purchase ) on top of my DD?

Apologies if it has been asked before. I would appreciate any replies.

cheers

thumshie

For the allocation of payment it says:
1. Interest on special offers
2. Other interest, and fee and charges
3. Special offers
4. Purchases and BT's

So your minimum payments should go towards the fee first, and by October be paid off, thus getting no interest..

wannabedebtfree_2

On the back of some statements, or if not in the literature you have for the account it will tell you how payments are distributed.

In fact, I have just quickly checked the Natwest CC statement for my other half and it states:

Allocation of payments:
1) Interest on special offers
2) Other interest, fees and charges
3) Special offers
4) Purchases and balance transfers
5) Cash advances and money transfers

So they should be allocating your payments to the charges first anyway, so as long as the charges amount has been paid before October you shouldn't pay any interest.

As for the other card I'm not sure, but the info is probably on the back of the statement.

Not all cards allocate payment like this so its always worth checking.

Moggles_2

While the majority of lenders now charge balance transfer fees - a trend started by MBNA - just four, AFAIK, charge interest on the fees.

Egg, Barclaycard, LTSB and the RBS stable which, as you know, includes Natwest, treat these handling charges as purchase transactions which are paid off last, so the BT fee is left sitting on successive monthly statements attracting interest.

The only way to avoid this practice, is to boycott these cards altogether or keep them for purchases only.

thumshie

Moggles are you sure about RBS???

I'm sitting with bills 1 and 2 from RBS infront of me(note post 2 was taken from my RBS bill)

Month 1 does show the Fee going down in the 'Purchases' row on the summary of balances. Month 2 has a balance of 0 from this column, so the first months payment(2.25%) was used for the fee(2%) with the remainder coming off the balance transfer column...


No that is no reason to boycot RBS??

Bokkens

Moggles wrote: »

The only way to avoid this practice, is to boycott these cards altogether or keep them for purchases only.

You could just read the T&C's and apply it to your own circumstances and use the cards whoever they belong too ,to your advantage as Martin suggested and is frequently practised on the Stoozing forum.

Bisoy

Thanks for all your replies guys. It could be a bit worrying if Bokkens is right. Anyway I have in front of me statements of my RBS and Natwest and both showed same order of allocation of payments. My intro purchase rate will expires in Oct. so I will see what happens on my next month statement on the purchases column or will give them a ring for clarification.