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Balance transfer interest calculation
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SilasMarner
Posts: 107 Forumite
in Credit cards
Can some Credit Card actuary confirm the following thought process please:-
Card balance comprises of three 0% transfers taken at different times. An earlier transfer has a longer 0% timing than the second. The second runs out earlier than the first, in terms of incurring interest.
Therefore my repayments are paying down the first transfer - even though the second transfer will incur interest (long) before the first transfer. Terms and conditions :- " For each type of balance your payments will pay off the oldest balance".
However as soon as the second tranche starts to incur interest then it will be cleared first. Terms and conditions:- "We use your payments to pay off highest interest rate first". So essentially, as soon as the second tranche incurs interest then my payments will hit and start to clear that one first. That is - I can just clear that amount immediately and completely, when it incurs interest, to avoid no more than a few pennies interest.
A matter of principle - if you excuse the pun. Thanks for plowing through this.....
Card balance comprises of three 0% transfers taken at different times. An earlier transfer has a longer 0% timing than the second. The second runs out earlier than the first, in terms of incurring interest.
Therefore my repayments are paying down the first transfer - even though the second transfer will incur interest (long) before the first transfer. Terms and conditions :- " For each type of balance your payments will pay off the oldest balance".
However as soon as the second tranche starts to incur interest then it will be cleared first. Terms and conditions:- "We use your payments to pay off highest interest rate first". So essentially, as soon as the second tranche incurs interest then my payments will hit and start to clear that one first. That is - I can just clear that amount immediately and completely, when it incurs interest, to avoid no more than a few pennies interest.
A matter of principle - if you excuse the pun. Thanks for plowing through this.....
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