0% balance transfer, making purchases with interest

john269

Hi,

Just wondering that if you have a 0% balance transfer for 12 months for example and you have set a direct debit up for minimum payout and say the minimum payout taken each month is £25, then if I made £25 worth of purchases on that card every month, would I end up paying interest on them purchases if the card offers a 52 day or so interest free period on purchases like many do, or would I receive interest from the day each purchase is made because the whole balance of the credit card was not removed due to the 0% balance transfer still on the card.

Hope you understand what I mean.

[Deleted User]

You would pay interest on those purchases unless you clear the full balance, including the BT.

Dobbibill

Interest is charged from the date the purchase is added to your statement.

The golden rule for getting your grace period on interest is to pay your BALANCE off IN FULL. As you have a BT on the card, you won't be clearing your balance, therefore no grace period applies.

Sharon87

Deleted_User wrote: »

You would pay interest on those purchases unless you clear the full balance, including the BT.

Untrue, you only pay interest on the purchases, not the BT. If you pay the purchases off you get charged interest for the days they are on your account. So if you do purchase something with a card with a BT on, advice is to pay that part off asap. Credit cards have to pay off the higher interest first.

So not a good plan really as you won't be paying anything off the 0%

[Deleted User]

Sharon87 wrote: »

Untrue, you only pay interest on the purchases, not the BT.

I didn't say that any interest would be paid on the BT.

I said that interest would be paid on the purchases unless the entire balance was paid in full, including the BT.

chattychappy

The problem with DD in this situation is that you could be paying interest unnecessarily as the DD is taken on the payment due date.

It might be better to pay manually as soon as you can. If you retain the DD, then be sure to understand the interaction between manual payments and DDs. If you cancel the DD, then of course you mustn't "forget" to pay. If you do, you will likely lose the promo deal.

Anthorn

chattychappy wrote: »

The problem with DD in this situation is that you could be paying interest unnecessarily as the DD is taken on the payment due date.

It might be better to pay manually as soon as you can. If you retain the DD, then be sure to understand the interaction between manual payments and DDs. If you cancel the DD, then of course you mustn't "forget" to pay. If you do, you will likely lose the promo deal.

This is beyond my understanding: Surely if the full balance (of purchases) is paid by or on the due date there is no interest to pay and it doesn't matter whether it's a DD or manual payment.

[Deleted User]

Anthorn wrote: »

This is beyond my understanding.

Indeed.

To benefit from a waiver of interest, the entire balance - including the BT - needs to be cleared. If the OP isn't doing that, the the purchases should be cleared as soon as they have statemened to minimise interest.

bigadaj

Isn't nationwide the exception that otherwise proves the rule?

Dobbibill

This causes regular confusion. You would only not pay interest if you pay you balance off in full each and every statement.
If there is a BT sitting on the card then the balance is not being paid off, only the purchase(s), therefore you do not benefit from the interest free grace period.

As the interest is calculated daily, the best way to minimise interest is to pay off the purchase as soon as it hits the statement. Preferably within a day or two.

Superscrooge

To prevent this problem, it's usually best to have separate CC's for purchases and balance transfers.

Whenever I get a 0% BT card. I will BT the max amount, then avoid using the card for purchases