Differences in balance transfer and purchases promotional periods

george4064

I took out a NatWest credit card recently (few months ago) which comes attached with two promotional offers:

1. 0% for balance transfers until March 2022
2. 0% for purchases until October 2020

My outstanding balance is majority from a balance transfer and some additional spending, I have had a direct debit setup to meet the minimum repayments to ensure I don't lose the promotional offers. However now that I have to repay any purchases I have made to avoid incurring interest charges;

1.Is it possible to setup a direct debit that automatically calculates how much I need to repay without incurring interest charges? (i.e. only repay the minimum repayment required plus any purchases I have made).
2. If not, what would you intelligent people suggest is the best way to manage these repayments?

Please note that I did the balance transfer as a 'stooze' where I made a large mortgage overpayment to the same value as the balance transfer to save on interest and now I am following a plan to save up the required amount to ensure I can pay off the balance transfer in full when that offer expires (March 2022).

Thanks in advance.

[Deleted User]

What you need to do is to clear the purchases balance, then switch all new purchases to a new card, which you can clear in full each month.  If you keep making purchases on the existing card, you'll be paying interest on them.

Then set your DD on the current card to the minimum and just ensure you clear in full by the end of the promo.

george4064

Deleted_User said:

What you need to do is to clear the purchases balance, then switch all new purchases to a new card, which you can clear in full each month.  If you keep making purchases on the existing card, you'll be paying interest on them.

Then set your DD on the current card to the minimum and just ensure you clear in full by the end of the promo.

Pardon my ignorance, but when you say 'then switch all new purchases to a new card' do you mean simply make new purchases on a completely different credit card? Or some sort of duplicate Natwest CC that can split my limit between the dormant balance transfer 'pot' and the active spending 'pot'?

[Deleted User]

A completely different card.

george4064

Deleted_User said:

A completely different card.

Understood.

In the meantime, will I have to make the minimum repayments each month plus repay the purchase balance to avoid any interest charges?

[Deleted User]

You can't avoid interest charges once your purchases are no longer at 0%. Interest is only waived if you clear the entire balance in full - including the BT.

There's a couple of cards which are the exception to this rule, but I don't your NatWest card will be one of them.

george4064

Deleted_User said:

You can't avoid interest charges once your purchases are no longer at 0%. Interest is only waived if you clear the entire balance in full - including the BT.

There's a couple of cards which are the exception to this rule, but I don't your NatWest card will be one of them.

Okay, so let's say my BT min repayment is £100 per month and I spend £250 on the card over August. Surely if I pay off £350 of the credit card before my purchases promotion ends that it will be fine?

[Deleted User]

Well yes, because it's still at 0%. 

george4064

I'm not sure I worded that very well, I will try again with some figures.

Current balances:

Purchase Balance £700 - 0% promotion ends 9th October 2020
Transfer Balance £7,000 - 0% promotion ends March 2022

Min repayment is £77 and is due by 4th October 2020. However if I repay £777, how can I be sure it will be allocated so that it will eliminate the £700 purchase balance rather than (unnecessarily reduce the BT)?

[Deleted User]

By checking the allocation of payment on your agreement or statement.  It's most likely that payments will go towards the 0% promo which is finishing first, but it doesn't have to be.  

If you can't find that information, then the only safe way is to wait for the day the purchases promo ends, and then pay it off.  A day's interest on £700 is going to be minimal.

george4064

Thanks and good point about waiting for the purchase promo to end and make the payment then but preferably I would like to avoid any interest charges if possible so will hold that as a last resort!

Allocation of payments does state that any payments will be allocated accordingly to the highest interest rate first etc, but it doesn't say how it allocates if all interest rates are the same (i.e. 0% across the board). One would hope that in the absence of sorting by interest rate it would allocate to the 'pot' whose promotional period is ending soonest.

Either way, I have asked NatWest and will wait to see what they say!