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mixed promo and non-promo debt on credit card -- which one am I paying off?
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mfs2
Posts: 4 Newbie

in Credit cards
Hello, I have a credit card (MBNA), which has a promo offer: purchases made on the first 60 days are interest-free for 12 months. I made a lot of purchases (£8000) in the first 60 days and stopped, but then accidentally made one more smaller purchase (£35) after the promo period. This debt is not interest-free apparently.
If I make a partial payment now (£200, the minimum), which part of the debt is it going to pay off? Is it going to clear this £35 and I'm interest-free again?
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https://www.mbna.co.uk/assets/pdfs/terms-and-conditions/general-credit-card-terms-and-conditions.pdf>> B7.4It's some ' Draft Credit Card Terms and Conditions', but I'm sure the principle is general.
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> 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.
Thanks, that's very reassuring! I was scrolling up and down this document for a while, thanks for finding it.
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Note that the payment will only go to the highest interest debt once it is statemented - i.e. if you only spent it a few days ago and it hasn't appeared on a statement yet, then the payment will not go towards it.1
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Legally they must apply payments to the balance currently with the highest interest rate.
Where it comes down to their choice/rules is where you have more than one balance with the same interest today in which case they could apply it to the one who's rate ends first or last.1 -
DullGreyGuy said:Legally they must apply payments to the balance currently with the highest interest rate.This is correct - with the caveat mentioned by msallen that you need to make sure the interest-bearing purchase has been statemented at the point you make the payment.DullGreyGuy said:
Where it comes down to their choice/rules is where you have more than one balance with the same interest today in which case they could apply it to the one who's rate ends first or last.
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msallen said:Note that the payment will only go to the highest interest debt once it is statemented - i.e. if you only spent it a few days ago and it hasn't appeared on a statement yet, then the payment will not go towards it.Life in the slow lane0
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MBNAs PDF statements should show you a list of your various balances against each promo rate / standard rate
As others have said, this won't reflect purchases made after the date at which the statement was taken0
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