Will BT pay off higher debt first?

kernowbeetle

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

grumbler

The answer is 'yes'.

For the explanation check your card's Summary Box for "allocation of payments".

Superscrooge

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

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.