Payment applied to longer deal

in Credit Cards
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SystemSystem Forumite
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This discussion was created from comments split from: I have been unsuccessful in returning £8000 odd back to HSBC.

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  • evilgrandmaevilgrandma Forumite
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    I have two 0% balance transfers at mbna , one expires in feb, the other in june. The whole of my monthly payment is being used to clear the june debt first, as its top of the  list in the summary box, meaning the feb balance is not reducing at all, despite the fact that i'm paying way more than the minimum payment required. Is this normal?
  • born_againborn_again Forumite
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    I have two 0% balance transfers at mbna , one expires in feb, the other in june. The whole of my monthly payment is being used to clear the june debt first, as its top of the  list in the summary box, meaning the feb balance is not reducing at all, despite the fact that i'm paying way more than the minimum payment required. Is this normal?
    Perhaps you would be better starting your own thread, rather than tagging on to the end of another tha has nothing to do with you query.
    Life in the slow lane
  • MallyGirlMallyGirl Forumite, Board Guide
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    I have split this out into a separate query
    I'm a Board Guide on the Debt-free Wannabe, Loans & Credit Cards boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Board guides are not moderators and don't read every post. If you spot an inappropriate or illegal post then please report it to [email protected]
    Any views are mine and not the official line of MoneySavingExpert.com.
  • edited 31 December 2020 at 12:49PM
    moleratmolerat Forumite
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    edited 31 December 2020 at 12:49PM
    Have you read your T&Cs ?  Are the payments being applied in accordance with those T&Cs ?
    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 normally 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. We may apply your payments differently if you are in persistent debt (see B7.8).

  • FarfetchFarfetch Forumite
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    As above, if your transfers have a fixed interest rate rather than a 0% BT offer then the money will go to the one that will cost you the most in interest. Given that your 2 deals are so close together ending, then presumably you would have the money to cover the 2nd transfer over the 4 months after the first so why not use it to pay off in Feb just in case? I had at one point, 4 BTs ongoing on one card each one was 18 months, 0%, Barclays just allocated them in date order i.e. the one with the earliest repayment date is cleared first, then the payment goes to the next, but I add more to the DD each time I do a transfer to ensure the total balance is paid off in full before it expires, even if it means I "lose" some of the free period of each transfer for my own peace of mind. 

    He who rejects change is the architect of decay. The only human institution which rejects progress is the cemetery.

    -Harold Wilson


  • MBNA go on the earliest transfer done, so if you had a two year deal, then 6 months later had a one year deal, the payments would go to the two year deal, so check the dates you took them out. Once interest starts being charged, then the payments will go against the interest bearing balance, so if you are paying more than the minimum, best pay the min and put the rest aside to pay once interest starts.
    excuse the username, what I wanted wasn't allowed. It's just a song title...
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