Payment Allocation

YorkshireBoy

RG2015 wrote: »

Obviously I hope that this is the case but I will wait for my statement and if it isn't clear I will phone Nationwide and post here with the answer.

You won't get your answer from your statement. Like a poster above I've checked mine and it isn't there. I've also checked my original docs received when I took out the product 3-4 years ago, and also the update received last year, and there's nothing additional to that on their website now.

It appears you first asked the question nearly a week ago. Maybe it would have been better to type what you typed then in a secure message to them? Even allowing for a 2 day turnaround you'd have got your answer - in writing, and from the horses mouth - before last weekend. As it stands, you're not going to get it for at least 2 more weeks...and even then only verbally when you call them.

Maybe send them a message now?

RG2015

Thanks Yorkshire Boy.

My current statement shows the due dates with balances for my purchases and my two balance transfers (May, June and July dates).

My next statement will include the BT out and will have to show the revised balances and due dates which will answer my question.

I may get an answer on the phone or by secure message but after waiting 7 days or my first answer here I am quite happy now to wait for my statement.

RG2015

My curiosity got the better of me and I sent a secure message to Nationwide. I wish I hadn't. Here is the reply:

Thanks for your recent message.

We offer what we call a positive order of payments, which acts in the customer’s best interest by paying off the most expensive debt first, saving you money. Cash withdrawals attract a higher rate of interest than purchases made in a shop, so if you had a cash withdrawal transaction on your account, any payment that you make would first be allocated to this, then any purchases that are outstanding and then to any 0% balance transfers.

As a responsible lender we operate our payment allocation to ensure that the highest interest bearing debt is reduced first.

Please note that payments are always applied first to any balance that has already been billed to you on a statement, and then to any transactions that have taken place since your most recent statement was issued.

There is no differentiating factor involved if all balances are at 0%.

When I get my statement I will be able to see how they allocated my payment without a policy on this. Perhaps their computer will blow up trying to differentiate without a factor. :rotfl:

jonesMUFCforever

I can see what they are saying and therefore my post would appear to be correct as paying the last 0% offer first would disadvantage you for the first and second offers.
(I think)

RG2015

jonesMUFCforever wrote: »

I can see what they are saying and therefore my post would appear to be correct as paying the last 0% offer first would disadvantage you for the first and second offers.
(I think)

Yes, it is implied but I was specific in my question so it is disappointing not to get a specific answer. In fact the no differentiating factor statement ignores their customer's best interest factor.

Dobbibill

wow - they don't make it very easy do they.

I agree with jonesMUFCforever, looks like the earliest to expire (therefore going to incur the highest charge) is where the payment should go.

TheShape

Dobbibill wrote: »

wow - they don't make it very easy do they.

I agree with jonesMUFCforever, looks like the earliest to expire (therefore going to incur the highest charge) is where the payment should go.

With the balances being at the same rate currently will they differentiate between them in that manner? Is a 'potential' future rate taken into consideration?

I've been looking at my Halifax card terms (prompted by another thread) that states balances with the highest rates will be paid first but that balances of the same type and rate will have payments allocated to the oldest balance first.

RG2015

I have now got my statement and can confirm that my payment was allocated as follows.

1. Purchases from last month's statement which were at 0% until May 2018 - fully cleared.
2. BT from last month's statement - 0% until June 2018 - fully cleared.
3. BT from last month's statement - 0% until July 2018 - part cleared
4. Purchases since last month's statement - 0% until May 2018 - not affected.

Therefore, the allocation is in my best interest apart from my current month's purchases. I believe that this is in accordance with their Ts&Cs that transactions since the previous statement will come last for payment allocations. I would have been slightly better off if I had waited until after my statement before my BT from Nationwide to my new 2 year 0% card.

nevstokes

jonesMUFCforever wrote: »

If payments are allocated to the higher rate first but they are all 0% IMO they would allocate payments to the earliest ending deal first then the second and finally the third.

I've just been bitted by this with HSBC who pay the earliest transactions first when more than one deal has the same interest rate, regardless of the ending date of those deals. Unfortunately I made my balance transfer first before taking advantage of the three month 0% on purchases so I got hit with interest this month, much to my annoyance.

RG2015 wrote: »

As a responsible lender we operate our payment allocation to ensure that the highest interest bearing debt is reduced first.

This isn't Nationwide being responsible; it's a regulation. Positive payment ordering was brought in over six years ago.

chattychappy

nevstokes wrote: »

This isn't Nationwide being responsible; it's a regulation. Positive payment ordering was brought in over six years ago.

As a matter of fact, Nationwide brought in the positive payment hierarchy before it became a requirement.