What happens if you spend on your CC after money transfer to bank account?

Alex9384

So let's say you have a 0% offer for X months to transfer cash from your CC to your bank account.
Your credit limit is £6000 and you transfer £5000 to your current account, then set up direct debit for minimum payment each month, which is 3% of the total balance (£150).
Then you use the card in store and spend another £100 on it, so the balance is now £5100.

After a statement is produced, will the direct debit payment go towards the £100 first? Card purchases in this case don't have the 0% period, so I assume the interest bearing balance should be reduced first. I know some people have had problems after spending on balance transfer cards. Is it the same with money transfers?

ItsComingRome

Payment will go towards the interest bearing debt first, but as you haven't paid the card balance in full you'll be charged interest.

I think Barclaycard is an exception to this who won't charge interest if the interest bearing balance is paid off in full but generally you'll have to pay interest.

Alex9384

ItsComingRome said:

Payment will go towards the interest bearing debt first, but as you haven't paid the card balance in full you'll be charged interest.

I think Barclaycard is an exception to this who won't charge interest if the interest bearing balance is paid off in full but generally you'll have to pay interest.

Interest on what? Say the direct debit is set for minimum payments. In case of Barclaycard it means 3% of the money transfer balance. If the money transfer is £5000, the minimum payment will be £150. If I spend £100 in store, does it mean the minimum payment will now only be 3% of that £100 ? Or will it still be 3% of the total balance? That would mean the whole £100 will be paid off, plus some portion of the money transfer balance. Does it work like this?

ItsComingRome

Alex9384 said:

ItsComingRome said:

Payment will go towards the interest bearing debt first, but as you haven't paid the card balance in full you'll be charged interest.

I think Barclaycard is an exception to this who won't charge interest if the interest bearing balance is paid off in full but generally you'll have to pay interest.

Interest on what? Say the direct debit is set for minimum payments. In case of Barclaycard it means 3% of the money transfer balance. If the money transfer is £5000, the minimum payment will be £150. If I spend £100 in store, does it mean the minimum payment will now only be 3% of that £100 ? Or will it still be 3% of the total balance? That would mean the whole £100 will be paid off, plus some portion of the money transfer balance. Does it work like this?

Your minimum payment will not change, its always x% of the balance.

jay1804

Alex9384 said:

So let's say you have a 0% offer for X months to transfer cash from your CC to your bank account.
Your credit limit is £6000 and you transfer £5000 to your current account, then set up direct debit for minimum payment each month, which is 3% of the total balance (£150).
Then you use the card in store and spend another £100 on it, so the balance is now £5100.

After a statement is produced, will the direct debit payment go towards the £100 first? Card purchases in this case don't have the 0% period, so I assume the interest bearing balance should be reduced first. I know some people have had problems after spending on balance transfer cards. Is it the same with money transfers?

It depends on the card and it's terms and conditions.

Alex9384 said:

ItsComingRome said:

Payment will go towards the interest bearing debt first, but as you haven't paid the card balance in full you'll be charged interest.

I think Barclaycard is an exception to this who won't charge interest if the interest bearing balance is paid off in full but generally you'll have to pay interest.

Interest on what? Say the direct debit is set for minimum payments. In case of Barclaycard it means 3% of the money transfer balance. If the money transfer is £5000, the minimum payment will be £150. If I spend £100 in store, does it mean the minimum payment will now only be 3% of that £100 ? Or will it still be 3% of the total balance? That would mean the whole £100 will be paid off, plus some portion of the money transfer balance. Does it work like this?

As you said in a later post it's barclaycard, they allow to make purchases and keep the to up 56 days interest free, if you pay the standard balance in full by the due date.

•  If you make purchases: You can buy things with your Barclaycard, but remember, to avoid standard interest you need to pay your full balance, excluding any promotional balances each month or interest will be charged on anything new you buy from the day the transaction appears on your account. Remember to make your minimum payment on time.

I'm been doing the exact thing you're trying to do.

My last statement balance was £2155.49 (£550 on 0% and £1605.49 standard balance)

My minimum pay was £80.83 which they were going to collect by DD, however I manually paid £1605.49, so they just took my  fixed payment of £40. 

However, because I made the manual payment, technically I didn't need them take the DD, that how you could keep transfer at 0% for the longest time. 

I like how Barclaycard work as I can get debit card spending for Halifax and a DD for another CA (Natwest, Barclays, RBS, ect) just from one card.

Alex9384

Thanks. And these are two separate balances? Or it's all together? Cash transfer + spending?


I like Amex for the same reason. They take direct debit much earlier than it's the due date. So I let them take the minimum payment first, which is 25 quids and then I pay the rest with my Halifax debit card. Amex is also great for switching accounts, because if something goes wrong in the switching process and your direct debit is not working on your new account, you can see the DD wasn't taken and you still have more than 1 week to pay it off manually. With other providers it would be a late payment already.

Belenus

Do you have or can you get another credit card to use for new purchases, leaving the existing card for that money transfer only?

Alex9384

Belenus said:

Do you have or can you get another credit card to use for new purchases, leaving the existing card for that money transfer only?

Yes, I have several cards already. I was just curious about how exactly it works. As Jay said, it might be the way to get the most of the 0% offer.

Alex9384

The Barclaycard has £7000 credit limit.

I transferred the max possible amount of £6300 + 163 fee (2.6%), so the balance is £6463.

First minimum payment will be £193 (3%).

So if I spend £193 on purchases and pay it off, will they still take another £193 by direct debit? Or just some portion of it? Or zero? That's what I'd like to know now.

ItsComingRome

Alex9384 said:

The Barclaycard has £7000 credit limit.

I transferred the max possible amount of £6300 + 163 fee (2.6%), so the balance is £6463.

First minimum payment will be £193 (3%).

So if I spend £193 on purchases and pay it off, will they still take another £193 by direct debit? Or just some portion of it? Or zero? That's what I'd like to know now.

Not to sound rude but this answer is easily Googled.

https://www.barclaycard.co.uk/personal/help/paying-bill/direct-debit-additional-payments

Alex9384

ItsComingRome said:

Not to sound rude but this answer is easily Googled.

https://www.barclaycard.co.uk/personal/help/paying-bill/direct-debit-additional-payments

Sorry, but it doesn't answer my question. If you think it does, why not to simply answer it, which would cost you less time and effort rather than googling the link, then copy-pasting it, with an additional comment. Much more work for you and still no answer.

I asked if the money transfer balance and spending balance is the same, because obviously it doesn't work like that with many BT cards and people have been charged interest when spending on BT cards after transferring balance. I'm not sure how it works with money transfer.

So, if I spend exactly £193 and then pay it off (the amount that was supposed to be taken by minimum DD), the overall balance will stay £6463 and I can repeat this every month and the balance will stay the same the whole time?