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Will BT pay off higher debt first?

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Hi, I have £8500 on Barclaycard, £4500 at 0% and the other £4000 at 18%. I have been offered a 0% bt deal on my MBNA card so if I BT £4000 to the MBNA will it automatically pay off the £4000 at 18% and leave the 0% deal on the Barclaycard?

Thanks

Comments

  • grumbler
    grumbler Posts: 58,629 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    The answer is 'yes'.

    For the explanation check your card's Summary Box for "allocation of payments".
  • Any payment should be allocated to the most expensive debt. So the debt at 18% APR should be paid off. See below leaflet

    http://www.theukcardsassociation.org.uk/wm_documents/Good%20news%20for%20credit%20card.pdf
  • fozmcfc
    fozmcfc Posts: 3,098 Forumite
    Part of the Furniture Combo Breaker PPI Party Pooper Debt-free and Proud!
    The only thing you need to be careful of, is if the £4000 at 18% wasn't on your last statement.

    So for instance, if say your last statement was on the 10th December and had a balance of £4500. Then you got the offer and so decided to buy something for £4000 on the 20th December and then transfer the purchase onto the MBNA card, any payment made (in this case the BT) would go towards the last statement amount i.e. £4500, because unless I'm mistaken, any payment goes towards the last statement balance and not the current card balance.

    If not you're good to go, but as the £4000 at 18% has been attracting interest, you'll have some days of interest on top, so don't expect the Barclaycard balance to be £4500, even when the £4000 is paid off.
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