Purchase and balance transfer fees

chris1226

I took out a balance transfer credit card which was 0% interest for 3 years with a purchase interest rate at 0% for 9 months. 

I purchased a holiday for £2500 on my credit card then paid it off in full the same day. 

However I am now getting charged interest on my purchases, as when I paid the 2500 in to cover the holiday the bank are saying that money went towards my balance transfer debt and as such my purchase debt is still outstanding.

Anyone else had this problem? It just seems the credit card companies way of getting extra money off people in interest rate.

It's clear from my transaction history that 2500 went out then same day 2500 came in so clearly evidence of me paying my purchase debt off and not contributing towards my balance transfer debt as they are trying to say  

Nebulous2

What do the terms and conditions say? They will detail the hierarchy of repayments. 

It is common however for debt not to be repaid if the charge hasn't yet appeared on your statement. 

It's often recommended that people don't mix purchases and balance transfers on the same card because of the potential for getting it wrong. 

grumbler

chris1226 said:

I purchased a holiday for £2500 on my credit card then paid it off in full the same day.

...

the bank are saying that money went towards my balance transfer debt and as such my purchase debt is still outstanding.

The same day - was the transaction even shown in your recent transactions? To make sure you should have waited until the statement was produced.

Now you have to read your T&C very closely - how payments are allocated against different parts of the balance.

General advice is not to mix BTs with purchases, but if you do this, make sure first that you know how this works.

alewin

chris1226 said:

Anyone else had this problem? It just seems the credit card companies way of getting extra money off people in interest rate.

They are not getting extra money off people, you clearly messed up trying to be clever.

Payments always go towards the balance on the latest statement. You did not even wait for the next statement which would include the holiday purchase.

Even then, any payments would normally go towards the oldest debt first. You should never mix spending with a current balance transfer that is being paid off. It will all be laid out in the card companys t&c's, different card companies have different rules.

grumbler

alewin said:

chris1226 said:

Anyone else had this problem? It just seems the credit card companies way of getting extra money off people in interest rate.

Even then, any payments would normally go towards the oldest debt first.

I don't think so. First goes the highest interest rate. If it's the same 0% then it's the earliest expiry date that goes first.

You should never mix spending with a current balance transfer that is being paid off.

Not really if familiarise yourself with the T&C and know what you are doing.

Brie

If it's very recent you could try ringing them up and asking to take pity on you for messing up your 0% deal.  But that will only work if you have only used this card for the 1 purchase.  if you are using it on a regular basis then because you haven't cleared the balance in full most cards will charge interest from the purchase date rather than however many days into the future.

alewin

grumbler said:

alewin said:

chris1226 said:

Anyone else had this problem? It just seems the credit card companies way of getting extra money off people in interest rate.

Even then, any payments would normally go towards the oldest debt first.

I don't think so. First goes the highest interest rate. If it's the same 0% then it's the earliest expiry date that goes first.

Yeah, your right.

I did the same thing, spent on a card on which I was already paying off a balance transfer.
Just some grocery shopping, thought I could pay if off first after the statement but got charged interest.
The card company let me off that time and refunded me. Don't mix them anymore.

Brie

Wait!  Just spotted this bit "I took out a balance transfer credit card which was 0% interest for 3 years with a purchase interest rate at 0% for 9 months."  So you seem to be saying that the same card allowed you to have both a balance transfer and make purchases with no interest for at least 9 months.  So if you are in, say, month 2 there should be no interest and they have messed up.  Call them to get it sorted.  If your T&Cs say that you can have both at the same time then they need to sort out their error.  If the T&Cs say BT or purchases then it's your error.

CliveOfIndia

Brie said:

Wait!  Just spotted this bit "I took out a balance transfer credit card which was 0% interest for 3 years with a purchase interest rate at 0% for 9 months."  So you seem to be saying that the same card allowed you to have both a balance transfer and make purchases with no interest for at least 9 months.  So if you are in, say, month 2 there should be no interest and they have messed up.  Call them to get it sorted.  If your T&Cs say that you can have both at the same time then they need to sort out their error.  If the T&Cs say BT or purchases then it's your error.

That's a good observation.  OP needs to clarify that the card does indeed offer 0% on both purchases and BTs.

But one thought occurs to me - did they make the minimum payment when the statement arrived, or did they assume that the same-day payment they made would cover it?  If they failed to make the minimum payment as detailed on the statement, any promotional deals would usually be immediately rescinded.

And given the fact that they made the payment of £2500 on the same day they made the transaction, it's highly likely that the transaction hadn't yet been statemented (as noted by Grumbler).

Finally, all credit cards will prioritise payments to the balance with the highest APR.  But where you have two 0% promotions running in parallel, it's important to read the T&Cs to see how payments are allocated.  Some will prioritise the promotion that started first, some will prioritise the one that ends first.

grumbler

alewin said:

grumbler said:

alewin said:

chris1226 said:

Anyone else had this problem? It just seems the credit card companies way of getting extra money off people in interest rate.

Even then, any payments would normally go towards the oldest debt first.

I don't think so. First goes the highest interest rate. If it's the same 0% then it's the earliest expiry date that goes first.

Yeah, your right.

I did the same thing, spent on a card on which I was already paying off a balance transfer.
Just some grocery shopping, thought I could pay if off first after the statement but got charged interest.
The card company let me off that time and refunded me. Don't mix them anymore.

You are being sarcastic, right? What did your T&C actually say about this?

https://www.barclaycard.co.uk/personal/credit-cards/your-interest-rates-and-balances