Differences in balance transfer and purchases promotional periods

D3xt3r5L4b

You shouldn’t mix promo cards with everyday purchases you intend to pay off sooner. It just leads to confusion such as this. 

george4064

NatWest were unsure but they did say that I have 56 days to clear purchase balances before incurring interest. (No idea about this!) So I should be able to pay off the purchase balance in full once the 0% promotion ends and use a different cc going forward so that the transfer balance card can sit there untouched.

Sharon87

If your balance transfer and purchases interest rates are exactly the same AFTER the 0% ends, then the one with the shortest period of time left will be allocated the money. If one standard interest rate is higher than the other most banks will allocate it to that - so for example a money transfer might be higher than a balance transfer. I had this problem with Halifax once. I was expecting one balance transfer to have been paid off but all payments were going to a longer money transfer instead!

The 56 days is the time between the beginning of your payment and the day your pay it I believe. So if you get charged for a transaction on the 1st of the month, you won't need to pay it off until your DD day which will be the next month. It can be less days than 56 though. as your statement will be from 1st to 31st, then your DD will be some time after that.

george4064

Since the 0% promotion for purchases ends on 9th October 2020, I guess that would be processed just like a normal purchase on a normal interest charging credit card made on 9th October 2020? i.e. It would get picked up in my October statement issued in early November for payment due by early December

george4064

One final question I am hoping you knowledgeable people will be able to help me with.

I am slightly unsure as to when I actually need to payoff the purchase balance without incurring any interest charges. To recap:
purchase balance of c. £700 which 0% promotion expires on 09/10/20
transfer balance of c. £9,000 which 0% promotion expires in March 2022

my statements are timed so that I have to make my normal (minimum repayment) by 4th of each month.

so my question is when exactly do I need to pay off the purchase balance to avoid incurring any interest charges? My statements cover the period from 10th of previous month to the 9th of the current month, so I would expect my statement issued in October covering the period 10th September to 9th October to show that my purchase balance is no longer 0% so I would need to pay off the purchase balance in full by 4th November (not 9th October) to avoid incurring any charges. Is my understanding correct?

[Deleted User]

You'd need to clear the purchases by 9 October. Interest accrues from that date.

george4064

Right okay thanks. I still haven’t got a straight answer from NatWest as to how my repayment would be allocated if all the balances are currently at 0%, all they’ve said is that payments are allocated first to the sections that are accruing at the highest rate.

[Deleted User]

It'll almost certainly be the purchases, as that promo finishes first.

The Natwest site is very unhelpful, but the below is from a sample credit agreement - point c is the important bit, with regard to paying off the promo that expires first. 

It's possible for the terms to be different across cards, but if I were you, I would make a full payment of the purchases on 6th or 7th of October just to be sure.
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(b)  You cannot choose how a payment is applied to your account. We apply any payments you make to your account in the following order: •  to pay your contractual Minimum Payment under section 2 of this Agreement;  •  to pay any Instalment Plan fees;  •  to pay any monthly Instalment Plan repayments (if you have more than one plan we’ll first  pay off the one which ends soonest);  •  to reduce sums shown on your most recent monthly statement (excluding Instalment Plans), according to their interest rates, with the highest rate paid first; •  to reduce the remainder of the outstanding balance(s) on any Instalment Plan(s) on the account; and  •  finally, if any payment exceeds your most recent monthly statement balance, the excess will then be applied to reduce sums charged to your account but not yet shown on any monthly statement. This is also done according to their interest rates, with the highest interest rate paid first. (c)  If parts of any of the balances referred to in (b) have the same: •  interest rate, sums on which interest is charged on interest will reduce first;  •  special offer interest rate, they will be reduced according to their special offer expiry dates, with the earlier paid first.