Silly me! BT and Purchases

abby1234519

I read a thread today that explained why you shouldn't spend on a Balance transfer card if the purchase offer wasn't the same length. Well unfortunately I read that after the event....

I have an MBNA card where I have transfered 2287.89 (inc fee) at 0% for 18 months

I stupidly put an emergency £59 on it. Standard rate is 23.9%

Bill hasn't been generated yet. I don't completely understand the whole thing about why not to spend on it as I thought I would have interest free on the balance transfer part and then just pay the £59 when the statement was generated. I now know that I'm silly to do that

How can I limit the damage? Should I pay the £59 off now before the statement is generated? How do I fix this/make it less worse

molerat

[STRIKE]Not a lot you can do until the statement is produced as there is a very good chance that any payment would go towards the last statement.[/STRIKE] Interest is not going to be much more than £1 (£59 over 1 year is £14.10 interest). [STRIKE]As soon as the statement is produced make a payment to cover the £59 and any interest.[/STRIKE]

See my post below.

abby1234519

I haven't had a statement produced yet, the card has been open for less than a month.Does this affect it?

grumbler

The only problem with spending on 0% BT card is that you don't get usual "up to ~55 days no interest on purchases" because the interest is waived only if you pay the statement balance in full.

So the interest gets charged on your £59 from day one until you pay this transaction off. The next payments will be allocated towards your purchases balance that isn't 0%. If you see this transaction online, pay it off now, and the interest will be negligibly small.

abby1234519

Ok thank you. I've just got this horrible feeling that I'll pay interest on that £59 until the card is completely cleared!

molerat

Looking at para 4.1 of the T&Cs it seems they allocate payments to the higher interest bearing items even if they have not appeared on a statement so pay it off as soon as possible to minimise interest.

molerat

abby1234519 wrote: »

Ok thank you. I've just got this horrible feeling that I'll pay interest on that £59 until the card is completely cleared!

No, under the new rules that item will be paid off first and will only accrue interest until paid off. The only doubt factor is whether it would be paid off if not appearing on a statement but looking at my MBNA T&Cs it seems it will be paid off first in any case.

abby1234519

Okay so I've paid it off. When statement is generated I will pay whatever interest has accrued AND a minimum payment to hopefully cover all eventualities. Silly me lesson learned

chattychappy

abby1234519 wrote: »

I stupidly put an emergency £59 on it. Standard rate is 23.9%

abby1234519 wrote: »

Silly me lesson learned

Personally I don't think it was silly thing to do if it was an emergency. It's simply a service you took up when you needed it and will pay a small premium for.

I was very hungry last night and stupidly paid £4.95 for a Cornish pasty, despite having some perfectly good food at home (which I ate anyway when I returned). That £4.95 is considerably more than what you'll pay for getting your £59 when you needed it!!

blink18

chattychappy wrote: »

Personally I don't think it was silly thing to do if it was an emergency. It's simply a service you took up when you needed it and will pay a small premium for.

I was very hungry last night and stupidly paid £4.95 for a Cornish pasty, despite having some perfectly good food at home (which I ate anyway when I returned). That £4.95 is considerably more than what you'll pay for getting your £59 when you needed it!!

seems expensive for a pasty, are you from that London, where they call any old assorted veg in some pastry a cornish pasty.

bet there was even carrots and peas in it

Ben8282

If this had not been a completely new card and statements had previously been produced, a payment made prior to the generation of the statement would have been applied to transactions which have already appeared on a statement and not the new transaction. Bear that in mind should you make a similar mistake in the future and do not pay off the purchase transaction until it has appeared on a statement.
In this case I think I would have waited for the statement just to be sure but you are probably ok.
The amount of interest that you will pay on this £59 is really quite small so not really anything to be over worried about.