Can Halifax do this?

Sheila70

In January 2019 I took out a 0% bank transfer Credit Card for 19 months and transferred a sum of money. I have been paying a fixed amount each month and have never used the card for anything else.

That was until I needed access to some money to buy some flights. I paid £2619 on the 11th December to my credit card. Halifax had already taken the £50 I was paying against the 0% APR and on the 17th Dec (6 days after putting the tickets on the credit card) I paid £2619 to Halifax (thinking this would pay off the flight tickets)

I had thought that this would automatically be paid off against the purchase of the tickets as their T’s & C’s on the statement state:

“We use your payments to pay off balances at the highest interest first and so on down to balances with the lowest interest rates.” As I had only had a 0% balance until this point, had thought it would automatically come off the purchase, rather than the balance transfer balance

On the 5th January they have charged me £33.40 in interest charges – with an APR of 19.45% – monthly 1.492% for 6 days does not equate to £33.40!

Not only that but they used the £2619 to pay off against the balance of the 0% interest balance so now my statement states that I have £281 outstanding balance against the 0% plan and £2652.40 against the 19.45% APR.

Can they really do this? Doesn’t seem at all fair to me. I have made a formal complaint, but what are my rights and are they correct in what they have done?

[Deleted User]

Yes, it's absolutely fine. It's outlined in their terms.

Statemented balances are paid before unstatemented and then according to the interest hierarchy.

ChrisJ1988

In the first instance I would check the Ts and Cs, in my experience they are rarely wrong with this sort of stuff.

CRISPIANNE3

Sheila70 wrote: »

In January 2019 I took out a 0% bank transfer Credit Card for 19 months and transferred a sum of money. I have been paying a fixed amount each month and have never used the card for anything else.

That was until I needed access to some money to buy some flights. I paid £2619 on the 11th December to my credit card. Halifax had already taken the £50 I was paying against the 0% APR and on the 17th Dec (6 days after putting the tickets on the credit card) I paid £2619 to Halifax (thinking this would pay off the flight tickets)

I had thought that this would automatically be paid off against the purchase of the tickets as their T’s & C’s on the statement state:

“We use your payments to pay off balances at the highest interest first and so on down to balances with the lowest interest rates.” As I had only had a 0% balance until this point, had thought it would automatically come off the purchase, rather than the balance transfer balance

On the 5th January they have charged me £33.40 in interest charges – with an APR of 19.45% – monthly 1.492% for 6 days does not equate to £33.40!

Not only that but they used the £2619 to pay off against the balance of the 0% interest balance so now my statement states that I have £281 outstanding balance against the 0% plan and £2652.40 against the 19.45% APR.

Can they really do this? Doesn’t seem at all fair to me. I have made a formal complaint, but what are my rights and are they correct in what they have done?

The golden rule is if you do a balance transfer or in fact a money transfer you never ever use the card for purchases. This is something Martin Lewis is always going on about.

And as you have found out to your cost this is because any purchases put on the card will attract interest.

My golden rule is to have two credit cards so you can use one for balance transfers and the other can be for purchases.


Taken from the Money advice centre site and confirms everything I have said

quote

It's usually recommended not to make any purchases with a credit card to which you have made a balance transfer. This is because any purchases you make will usually be charged at your card's standard rate (unless there is a 0% deal on purchases too - if there is, check how long that lasts).

unquote

born_again

If you use your card for a balance transfer. Then use it for ANY PURCHASES. DO NOT pay anything till you receive a statement or any payments go towards the pre statement balance.

You could try ringing Halifax and see if they as a good will gesture adjust the payment to the purchase and not the balance transfer.
If you explain that you were not aware this would happen and now understand it was your fault in being to hasty to ensure that you did not incur any interest on your flight tickets.

18cc

It sounds like you made the mistake of not waiting for the next statement before paying off the flight cost.

Because the flight purchase wasn't statemented, the money went towards the outstanding balance on your previous month's statement.

foxy-stoat

Sheila70 wrote: »

That was until I needed access to some money to buy some flights. I paid £2619 on the 11th December to my credit card. Halifax had already taken the £50 I was paying against the 0% APR and on the 17th Dec (6 days after putting the tickets on the credit card) I paid £2619 to Halifax (thinking this would pay off the flight tickets)

I had thought that this would automatically be paid off against the purchase of the tickets as their T’s & C’s on the statement state:

“We use your payments to pay off balances at the highest interest first and so on down to balances with the lowest interest rates.” As I had only had a 0% balance until this point, had thought it would automatically come off the purchase, rather than the balance transfer balance

You thought wrong. Not sure why you used your card to buy flights on 11th then used your current account to pay the credit card 6 days later.....why not just use your debt card....I guess you wanted the S75 cover if needed. This cover is going to cost you now.

Best thing you can do is apply for another credit card and balance transfer back onto 0% interest and cancel the halifax card.

Abbey1991

Sheila70 wrote: »

“We use your payments to pay off balances at the highest interest first and so on down to balances with the lowest interest rates.” As I had only had a 0% balance until this point, had thought it would automatically come off the purchase, rather than the balance transfer balance

This seems misleading if they also have hidden T&Cs which say different.

You might have a good case for the Ombudsman.

[Deleted User]

Abbey1991 wrote: »

This seems misleading if they also have hidden T&Cs which say different.

They're not hidden. They're the ones the OP agreed to when they took out the card.

foxy-stoat

Taken from a Halifax monthly statement:

Allocation of payments
We use your payments to clear any overdue amounts before we apply them to your latest minimum payment.
We will reduce the amount you owe in the following order:
· any overdue amounts from previous statements;then
· the remaining balance on your statement;then
· any recent transactions not yet shown on your statement.
We use your payments to pay off balances charged at the highest interest rate first and so on down to balances with
the lowest interest rates. This means the more expensive balances are always paid off first.
If there is more than one type of balance at the same interest rate, they are paid off in the following order: cash
transactions, purchases, balance transfers and money transfers, and then default charges (plus any interest or charges
incurred as a result of those balances). For each type of balance, your payments will pay off the oldest balance (and
related fees, charges or insurance) first.

If you have a 0% interest balance on a statement dated 1st January say and the minimum payment is due on 15th January that doesn't clear the balance and you add new spending on 20th and you pay before the next statement the amount of the new spending then whatever you pay goes to clearing the 0% balance.

You can easily get it back on 0% by taking out another BT card and transferring it over.

Abbey1991

I agree that for someone savvy and in the industry, the whole paragraph makes sense and is clear.

However this sentence needs to be re-worded, and I reckon the Ombudsman would agree:

foxy-stoat wrote: »

This means the more expensive balances are always paid off first.