BT and Purchases on the same card

redux

Even if it does not work exactly as it seems to be described there, or for people considering other cards, doing modest monthly spending and paying that in full will incur some interest, but not very much.

It can also preserve the benefit of the whole balance transfer for longer, instead of gradually paying that off.

For instance consider a Tesco card with a £2600 limit, and transfer £2500 of balances to it. Paying £25 minimum every month would see £600 paid off in 2 years, but instead spend £25 to £30 a month, and pay this off the day after the statement instead of waiting until due date. The month's interest will be about 15 or 30 pence, depending when the spend was.

So when people suggest don't do any spending at all on cards with balance transfers, I slightly disagree, even if Martin Lewis suggested it. In effect the example I described above, done carefully, borrows £600 for 2 years at a total cost of about £3 to £5, or upscale the numbers for other examples.

planteria

redux wrote: »

.. in full will incur some interest, but not very much.

i don't want to pay any interest:A.

redux wrote: »

It can also preserve the benefit of the whole balance transfer for longer, instead of gradually paying that off.

i like this point. I was thinking exactly that. by spending you can ensure that you are actually getting those funds for the full duration of the promotional deal: getting your money's worth.

and yes, good example with the Tesco card. but from my understanding with Barclaycard there's no need to pay the bill just after it is produced.

chattychappy

planteria wrote: »

i don't want to pay any interest:A.

I have posted almost identical posts to redux in the past. If you really want to maximize the efficiency of this scheme, then time your purchases so they are made just before statement date and then pay them off just after statement date.

But whenever you do it, yes there will be some interest. BUT,you were happy to pay a BT fee in the first place. By paying a small amount of interest on your purchases up to the level of minimum payment, you are effectively purchasing an extended 0% period on the amount of your purchases. The interest is likely to be less than a BT fee, though as the months roll by you are "buying" a progressively shorter 0% period.