BT offer from HSBC - does this sound right?

Simon7685

I have received through the post an offer from HSBC for a 0% BT. In the literature it states;

What happens to Purchases I make?
Interest on any purchases you make will continue to be charged at your standard purchase rate. Any payments you make to your card will be applied to the parts of your balance incurring the highest interest first.

So in theory if I did a BT of £1000 in March and then spent £100 in purchases, I can avoid interest by paying off the £100 when the statement comes in. So if I paid £200 I would clear the purchases, pay £100 off the BT and incur no interest.

I have always understood that if you made purchases on a card that had a 0% BT on it, you would pay interest on those purchases unless you paid the whole lot off including the BT. This seems to suggest different, unless I am reading it wrong?

I get BT/MT offers all the time on most of my cards but I have never noticed one like this before. it seems like the best of both worlds. I have sent HSBC a message to clarify but they haven't come back yet and I am really curious about this now.

Just to clarify the HSBC card I have was originally taken out as a 30 odd month BT card, which was cleared well within the time frame. It wasn't an all round card.

C.M.

payments made are always applied to the balance with the highest interest first - this would be the case on any card with a 0% offer running alongside any other interest paying balances

YorkshireBoy

You only get your "up to xx days interest free" on purchases if you settled the previous two statement balances in full. Anyone with a 0% BT running won't have done that. Ergo it is impossible to avoid interest on any purchases made.

Only Nationwide, after their upcoming changes, is the exception to this (at the moment I believe).

Simon7685

This is what I always understood and as if to compound logged into Halifax today to check my current acc and there was an offer on my Halifax CC for a 2 yr 0% BT. ever curious I checked the T&C's and it clearly stated that if purchases were made after a BT they would only be interest free if the whole balance of the card including the BT was paid off.

It leads me to think that HSBC are little naughty with their offer phrasing as does sound like you can keep 0% by paying off purchases in full each month. I wonder how many people have fallen foul?

Still no official answer from HSBC after messaging them for clarification.

grumbler

Simon7685 wrote: »

...
It leads me to think that HSBC are little naughty with their offer phrasing as does sound like you can keep 0% by paying off purchases in full each month.

What part of their offer sounds like this?
I don't see any.

Interest on any purchases you make will continue to be charged at your standard purchase rate. Any payments you make to your card will be applied to the parts of your balance incurring the highest interest first.

I.e. interest is charged until you pay the purchases off. Nothing about 0% on purchases, but 0% on the BT remains regardless.

Still no official answer from HSBC after messaging them for clarification.

Well, what clarification do you want? It's one of The six golden rules:

• 3. Never spend or withdraw cash on these [BT] cards

planteria

fair point grumbler.. i have a great limit on my Barclaycard Cashback account, and have been tempted to borrow from them, but i use it as a useful spending back up, and have considered trying to BT & Spend, ensuring i pay enough back to avoid interest.. but i don't think it's worth the effort/risk. safest to just keep BT and Spending separate.

grumbler

"Risk" implies some uncertainty. Interest on purchases combined with BTs is a certainty, not a risk.

planteria

i meant the risk of doing it wrong.. but you mean it is certain to cost?
i think done right the interest can be avoided, can't it?
making a payment which represents the minimum payment towards the BT balance but also clears spending in full?
i've been through a lot of credit card action, but not tried to use a card both ways in this respect.:think:

grumbler

planteria wrote: »

i think done right the interest can be avoided, can't it?
making a payment which represents the minimum payment towards the BT balance but also clears spending in full?

You keep missing the point.
The interest on purchases is waived only if the balance is paid in full, not just 'spending' balance. The only way to avoid the interest on purchases is to keep clearing spending balance the same day you make purchases.

Simon7685

grumbler wrote: »

What part of their offer sounds like this?
I don't see any.
I.e. interest is charged until you pay the purchases off. Nothing about 0% on purchases, but 0% on the BT remains regardless.

Well, what clarification do you want? It's one of The six golden rules:

• 3. Never spend or withdraw cash on these [BT] cards

Maybe you do not see it but I would hazard a guess that many people do;
Any payments you make to your card will be applied to the parts of your balance incurring the highest interest first.
As you would have a BT on the card with a 0% rate the highest interest bearing amount would be any regular spending on the card. So it does make it sound as though if you cleared any monthly spending in full no interest would accrue on the account.

I am fully aware of the golden rules thanks very much and always follow them. I was merely curious of the wording in the offer I received, which I believe does lead you believe that you could run purchases alongside a BT without incurring interest if the purchases were paid in full each month. So this is the clarification I have sought from HSBC.

I have had a number of successfully managed BT's in the last couple of years and am not in the habit of spending on the cards at the same time and I certainly do not ever withdraw cash on any of my cards. That does not mean I am not curious about things when I see offers I am given.

YorkshireBoy

Simon7685 wrote: »

Maybe you do not see it but I would hazard a guess that many people do;
Any payments you make to your card will be applied to the parts of your balance incurring the highest interest first.

The key word here is "incurring", ie if you have not repaid the previous balance in full your balance (both existing purchases and new purchases) is currently "incurring" interest. It's to this purchases balance "incurring" interest that your payments are applied.

It's very clear to me I'm afraid. But then again because I actually read (so I understand) the T&Cs I'm aware of the other, related, conditions...most notably the one I mentioned earlier regarding paying the previous bill in full to ensure any and all purchases remain interest free.