Virgin Money purchase/BT promotional rates

AliceBanned

Hi

I have a Virgin Money card with the following promotional rates:

Purchase 0% until 4.2.22 (balance £1600)
Balance Transfer 0% until 6.2.24 (£2700)

Stupidly I was thinking that I won't pay any interest on the card until Feb 2024, if I stop using the card for spending. But that can't be right can it?

I had a look at the statement and tried to phone Virgin but can't get through. I am now realising that unless I pay off the full balance, I will be charged the standard APR on the balance of £1600 from Feb this year?

I can do a balance transfer to another card but with fees of 2.9% - if I need to do this. I was stupidly paying off the other card that has no interest until Nov 2022, first but I just got my Virgin statement and thought I'm making a mistake. What I don't understand is, if I pay off the purchase balance, is that enough or does it have to be the whole balance? 

Thanks for any light anyone can shed on this. I must be having a bit of a mental block but want to avoid interest and realise I will probably have to pay fees to BT. I have two other card options but as mentioned the other card is only 0% until Nov 2022 a well so I was hoping to pay that off. Don't want to apply for too many and look desperate. I'm currently repaying my total balance on cards of £9000 at £400 per month. And stopped spending on them all - used them for new flat purchase and home renovations so it felt under control, as long as I don't do any more renovating or overspending in any way!

Brie

Any payment you make will go towards the higher interest rate or (as currently) the promotion that was taken first.  Check your bills to see what is happening with the relevant balances to see if the 0% BT is reducing or the purchase one.  

Then as of 5/2/22 things get less complicated as your purchases will start accruing interest.  In this situation I tend to wait til that day so it's clear how things will be allocated and then sling a ton of ££ at the card.  That way it will all go to the purchases leaving your 0% BT intact.  

Brie

fyi - a BT to clear the purchases even at 2.9% will be significantly less than the interest you will be charged on the purchases (poss 29% ish?) - assuming you don't clear them all within a very short period.  (say 2 months)

molerat

As above, you need to be certain what is currently being paid down before you do anything as if you get it wrong you could end up BTing to the existing BT rather than the purchases.

AliceBanned

Brie said:

Any payment you make will go towards the higher interest rate or (as currently) the promotion that was taken first.  Check your bills to see what is happening with the relevant balances to see if the 0% BT is reducing or the purchase one.  

Then as of 5/2/22 things get less complicated as your purchases will start accruing interest.  In this situation I tend to wait til that day so it's clear how things will be allocated and then sling a ton of ££ at the card.  That way it will all go to the purchases leaving your 0% BT intact.  

Thanks Brie. I'm so glad I realised there was a problem and asked on here - standard APR is 23.29% on purchases  and 21.66% on balance transfers.  . I've checked the statement just now and it says that the balance on the promotional rate ending the soonest will be paid off first. So as long as I pay £1600 by around 5/2 I shouldn't pay interest? Thanks

AliceBanned

molerat said:

As above, you need to be certain what is currently being paid down before you do anything as if you get it wrong you could end up BTing to the existing BT rather than the purchases.

Thanks Molerat. I usually understand credit cards more than this but now realise I've not been offered many purchase cards in the past, so not used to using them! This one having the shorter promotional rate by far than the balance transfer rate is a bit of a danger! I'm just printing the statement off now on my very slow printer as trying to read it on my phone is not helping. 

AliceBanned

So the statement says:
We allocate payments firstly to any default charges, interest, annual card fee, and non-instalment plan balances, with the highest interest rate first, before repaying those on lower interest rates'.

Oh I see also so I get my next statement on 7th Feb, so that will show the interest chargeable if I only make the minimum payment?

molerat

My Virgin card statement says this

When we are allocating your payments in the above order, we will take the following into account:
> Where we charge interest on multiple promotional balances and/or instalment plans at the same rate, we will pay off the balances in the order that the rate or instalment plan is due to end (for example, an instalment plan that is due to end in two months’ time will be paid off before a promotional rate that ends in six months’ time).

So all payments go towards the first ending promo.  Do statements not break down the different balances so you can see which is decreasing monthly ?

Brie

Sometimes it's hard to tell what's happening with promotional rates with credit cards.  MBNA are incredibly clear and list each promotion, end date, amount still owing.  M&S cards don't list promotions at all - it's just lumped into the overall total and I need to contact them monthly to find out how much needs to be paid (as they aren't clear about how they allocate returns and other non payment credits).  I don't have a Virgin card so can't comment on that.

But if the purchase promotion ends on 4/2 then as of 5/2 you will have interest being acrued.  On what basis is impossible for me to know....it could be the purchase balance from 4/2 on or it may go back to that last statement date.  But the crucial thing is that any payment you make as of 5/2 will go towards the purchases and not the BT.  

I don't bother to ring M&S to find out about my BT but instead query it by their secure messaging.  That way I have a record of what I'm told that they cannot contradict.  Most times they are fine but occasionally someone makes a mistake and as a result I pay the wrong amount.  When that happens I can complain knowing that they will have to remedy the situation.

AliceBanned

molerat said:

My Virgin card statement says this

When we are allocating your payments in the above order, we will take the following into account:
> Where we charge interest on multiple promotional balances and/or instalment plans at the same rate, we will pay off the balances in the order that the rate or instalment plan is due to end (for example, an instalment plan that is due to end in two months’ time will be paid off before a promotional rate that ends in six months’ time).

So all payments go towards the first ending promo.  Do statements not break down the different balances so you can see which is decreasing monthly ?

Yes thankfully there is a clear breakdown, but it still nearly caught me unawares until I realised today that this promotional rate ends much sooner than the Sainsburys Bank card that I was working on paying off first, before the Sainsbury's promotional rate ends!

I had paid all my cards off before March last year, as I needed to to get a mortgage. But I knew I would need to get new cards straight afterwards. As soon as it has crept or to a dangerous amount of debt for me I started paying them off, but all are still 0% for now. 

Now that living expenses are going up I don't want to risk having debt I can't pay off in a few months' time but I'm already hitting an amount that is going beyond that, so easily done. And I was a former DFW so need to go back to that thread! :-)

AliceBanned

Brie said:

Sometimes it's hard to tell what's happening with promotional rates with credit cards.  MBNA are incredibly clear and list each promotion, end date, amount still owing.  M&S cards don't list promotions at all - it's just lumped into the overall total and I need to contact them monthly to find out how much needs to be paid (as they aren't clear about how they allocate returns and other non payment credits).  I don't have a Virgin card so can't comment on that.

But if the purchase promotion ends on 4/2 then as of 5/2 you will have interest being acrued.  On what basis is impossible for me to know....it could be the purchase balance from 4/2 on or it may go back to that last statement date.  But the crucial thing is that any payment you make as of 5/2 will go towards the purchases and not the BT.  

I don't bother to ring M&S to find out about my BT but instead query it by their secure messaging.  That way I have a record of what I'm told that they cannot contradict.  Most times they are fine but occasionally someone makes a mistake and as a result I pay the wrong amount.  When that happens I can complain knowing that they will have to remedy the situation.

Good plan Brie. Can't believe M&S get away with being so unclear. Virgin is not too bad, the separate balances are there. With different costs I am surprised the Financial Conduct Authority allows anything else. People could get stung so easily and as I mentioned, even having to read my statement on my phone was a disadvantage and nearly ended in me not reading the statement properly.

I'm trying to find out what the fee would be to BT onto my Sainsbury's card but it's not clear, I'd have to phone them. They probably hope I just do the transfer and then notice the fee after. Am tempted to apply for a low fee Tesco card which is showing as 95% likelihood of approval and transferring the Virgin balance onto it. I don't like paying fees over 2% with such large balances.

I really found the 0% purchases card useful and would like to be in a position to get another in the future but my credit rating might need more improvement.