Credit card repayments explination

EmK2016

Hi all,

Firstly, apologies if this has been asked a million times before, I just need re assurance and clarification before I go ahead and before the offer runs out.

Wanting some advice if anyone can help, we are looking at purchasing a car from a friend for £600. We have a balance transfer credit card that is offering us a cash transfer at 0% until 1st December this year.

This would help us perfectly as we are currently waiting for bits of money to be paid which will pay for the car, but we don't have that money just yet (will be a month or 2 max).

We already pay alot more than the minimum off the credit card balance, and will pay further chunks off as the money comes through.

My question is, if the CC balance is say £2000, and we cash transfer £600 to our bank account making the total balance £2600, will the repayments we currently make pay off the cash transfer first? the balance transfer balance is 0% until June 2019, so plenty of time to clear that balance, but the cash transfer is only 0% until 1st December and I want to ensure that balance gets cleared 1st so we don't get hit with interest rates.

'I think i'm right with that, have been on the CC website etc but just want someone to tell me that 'yep thats what happens!!!'

Its all very new to me using credit cards in this way, it just seems the easiest way to get hold of the £600 cash straight away, and we have no doubt that we can clear it very quickly once other funds arrive! I am aware we will be charged a fee, which it stated in the offer was 1,4%, but i'm sure thats going to be cheaper than taking out a loan?

Thankyou and apologies if this has been asked a million times by others, I just need re assuring!

YorkshireBoy

You'd need to check your account T&Cs to be sure which balance is repaid first*. You're looking for the section on 'order of payments' or 'allocation of payments'. If you're struggling, if you say which card it is, and provide a link to the T&Cs I'm sure someone will be able to help.


*For example, some say the 0% offer with the earliest start date, whilst others say the 0% offer with the earliest end date.

EmK2016

Allocation of payments?

it says payments will be applied in this order:

1.make any purchase plan payments due for that month
2. reduce your main balance (your statement balance less any purchase plan balance) we will start with the balances charged at the highest interest rate first and then reduce the the lower rate balances and then
3. if youve taken out any purchase plans, to reduce any remaining purchase plan balance.

Its a Barclaycard platinum visa.....

YorkshireBoy

Did you miss this bit?...

Barclaycard_Platinum_Visa_T&Cs wrote:

If you have more than one promotional balance at the same interest rate, we’ll use your payment to reduce the balance with the promotional rate that ends first

takman

EmK2016 wrote: »

Hi all,

Firstly, apologies if this has been asked a million times before, I just need re assurance and clarification before I go ahead and before the offer runs out.

Wanting some advice if anyone can help, we are looking at purchasing a car from a friend for £600. We have a balance transfer credit card that is offering us a cash transfer at 0% until 1st December this year.

This would help us perfectly as we are currently waiting for bits of money to be paid which will pay for the car, but we don't have that money just yet (will be a month or 2 max).

We already pay alot more than the minimum off the credit card balance, and will pay further chunks off as the money comes through.

My question is, if the CC balance is say £2000, and we cash transfer £600 to our bank account making the total balance £2600, will the repayments we currently make pay off the cash transfer first? the balance transfer balance is 0% until June 2019, so plenty of time to clear that balance, but the cash transfer is only 0% until 1st December and I want to ensure that balance gets cleared 1st so we don't get hit with interest rates.

'I think i'm right with that, have been on the CC website etc but just want someone to tell me that 'yep thats what happens!!!'

Its all very new to me using credit cards in this way, it just seems the easiest way to get hold of the £600 cash straight away, and we have no doubt that we can clear it very quickly once other funds arrive! I am aware we will be charged a fee, which it stated in the offer was 1,4%, but i'm sure thats going to be cheaper than taking out a loan?

Thankyou and apologies if this has been asked a million times by others, I just need re assuring!

Why are you paying alot more than the minimum if you have a balance on the card that is at 0% interest?.

The best way is to pay the minimum each month and put any extra into a savings account paying the best rate of interest you can find (usually a high interest current account). Then when the offer comes to an end use the money to pay off the balance and you would have also earned some interest as well as profit.

Also if you had done this then you would have had the £600 in your savings account ready to be used. So you could have used this £600 to pay for the car and then put it back in the account when you get the money in a couple of months. Also this would save you paying the one of fee to you card for the 0% cash transfer offer.