Eliminating minimum payments

I have 2 stoozes running at the moment, 0% deals with Virgin and MBNA for 37 and 34 months, approx £6k each, all good.

However, as we know, unless you have enough money out of your surplus cash to pay the minimum monthly payments, then the stoozed balances get gradually eaten away by the minimum payments.(in this case 1%, so about £120 a month)

So, Yorkshire Boy over on the CC board gave me an idea. These days credit card companies apply any payments you make to the highest interest part of your balance first. (The fact that they all seem to do this makes me think it's probably a result of a regulation)

So, could I make purchases each month on my 2 cards of just over £120, and then pay that amount at the statement due date. This will be more than the minimum payment, and because purchases attract interest at the standard 22% or whatever, the payment should be applied to this first, and in theory, this should leave the 0% balance intact.

(When I say purchases, I just mean to divert some spending that would normally go on my usual Amex rewards card, not additional spending.)

Does anyone do this?

Am I missing something obvious?

Thanks in advance.


  • Superscrooge
    Superscrooge Forumite Posts: 1,171
    Part of the Furniture 1,000 Posts Name Dropper
    I remember reading, probably about a year ago, that regulations had changed and credit cards companies have to allocate any payments to the highest interest part of your balance.

    I can't think of any reason why your suggestion won't work although I have never tried it myself.

    I have always adopted the traditional approach of having a 0% balance transfer card and a 0% purchases card.
  • Dan83
    Dan83 Forumite Posts: 648 Forumite
    I've got a tesco 0% purchase credit card, the 0% on purchase is for the full duration of the offer period, so if I spend £100 in month 1, it's at 0%. If I spend £100 in month 2, 3, 4, 5 (all the way up to 24) I still pay 0%. If I then send £100 in month 25, I get charged interest. Check your T&C's, or give them a ring, your cards may be the same
  • Marcio45
    Marcio45 Forumite Posts: 239
    Seventh Anniversary 100 Posts
    Normally, when you have already a balance transfer on the credit card any purchases that you do will attract interest from day 1, instead of the "up to 50 odd days interest free if paid in full".
    This is because the condition that you have up to 50 days interest free only applies if you pay full balance on statement. But as you have a balance transfer that you dont intend to pay in full that month interest will apply for the new purchases.
    There are some cards coming up like the nationwide that put the balance transfers and purchases on a different pot, but the above is still the general rule.
  • rtho782
    rtho782 Forumite Posts: 1,183
    Part of the Furniture 1,000 Posts
    Marcio gets it right.

    Yes you can do this, but you'd pay interest on the purchases from day 1.
    Deposit Saved since 01/12/15: [STRIKE]£13,000 / £15,000[/STRIKE] House Bought!

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