Payment Allocation

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  • MorningcoffeeIV
    MorningcoffeeIV Posts: 1,946 Forumite
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    Belenus said:
    Thanks Clive.

    Now comes the killer.  You go and make a purchase (assuming you don't have a 0% purchase offer as well).  The remaining BT balance attracts interest at 0%, and the purchase attracts interest at 30% or whatever.  If you were to pay the full statement balance then no problem, the accrued interest would be waived.  But if you pay less than the full amount, you'll be charged interest - £0 on the BT portion, and £5 (for example) on the purchase portion.  And you'll continue to be charged interest each month until the full statement balance is cleared.

    Can they really charge interest until the full statement balance is cleared?

    Yes. It's standard on all credit cards 

    But it's charged at the prevailing rate. So your BT is charged interest every month, at 0%. 

    People confuse '0% interest' with 'no interest'.
  • Belenus
    Belenus Posts: 2,554 Forumite
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    grumbler said:
    https://www.barclaycard.co.uk/content/dam/barclaycard/documents/personal/existing-customers/terms-and-conditions-barclaycard-core-2020.pdf

    If you pay your main balance (excluding any promotional balance with a 0% interest rate) plus any instalment plan payments due for that month in full by your payment due date, the following will apply that month: • We won’t charge interest on new transactions that have been added to your account since your last statement.
    So, @Belenus seems to be right - no interest on new purchases if they are paid in full.

    Would it be counter productive for credit card companies to charge interest on new purchases even if they are paid in full?

    They are presumably trying to attract new customers who will run up interest payments and/or carry on using the card after the interest period expires.

    If they discourage customers from also using the BT cards for purchases, those customers will use other cards and not get into the habit of using the BT card and may never use it past the interest period expiry date.


    A man walked into a car showroom.
    He said to the salesman, “My wife would like to talk to you about the Volkswagen Golf in the showroom window.”
    Salesman said, “We haven't got a Volkswagen Golf in the showroom window.”
    The man replied, “You have now mate".
  • MorningcoffeeIV
    MorningcoffeeIV Posts: 1,946 Forumite
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    Belenus said:
    grumbler said:
    https://www.barclaycard.co.uk/content/dam/barclaycard/documents/personal/existing-customers/terms-and-conditions-barclaycard-core-2020.pdf

    If you pay your main balance (excluding any promotional balance with a 0% interest rate) plus any instalment plan payments due for that month in full by your payment due date, the following will apply that month: • We won’t charge interest on new transactions that have been added to your account since your last statement.
    So, @Belenus seems to be right - no interest on new purchases if they are paid in full.

    Would it be counter productive for credit card companies to charge interest on new purchases even if they are paid in full?


    No. It provides an income stream, rather than every 0% BT being a loss leader.
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