We'd like to remind Forumites to please avoid political debate on the Forum. This is to keep it a safe and useful space for MoneySaving discussions. Threads that are - or become - political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.

How does interest work when you have two different offers on the same balance transfer card?

DocQuincy
DocQuincy Posts: 246 Forumite
Ninth Anniversary 100 Posts Name Dropper
edited 7 November 2023 at 7:46AM in Credit cards
Here's my situation: I got a really good balance transfer deal on a card some time ago. The interest-free period ends April 2024 but I still have a bit to pay on it.
This month they have an offer for 12 months interest-free (on the same card). I would like to use this for something I need to buy now and pay for it next year without paying interest.
So let's say I have £2,000 on the card already and interest starts being charged 1 April 2024.
I do a 12 month balance transfer this month for another £2,000.
Once that's gone through, leaving a balance of £4,000, and I then make a payment next month for £1,000, am I paying the balance off the first or second offer? E.g. if I paid off £2,000 before 1 April 2024 would the balance still be interest-free until November 2024?
Thanks.

Comments

  • It'll be as per the terms of the card. 

    There is no standard approach where two balances are at the same rate.
  • DullGreyGuy
    DullGreyGuy Posts: 14,815 Forumite
    10,000 Posts Second Anniversary Name Dropper
    The regulations state when there are two or more balances currently attracting interest then payments must be allocated to the balance with the highest rate of interest. 

    Where the interest rates on different balances are currently the same there are no regulations on how the payment must be allocated and so it comes down to the individual card issuer's terms. These do vary between issuers.
  • molerat
    molerat Posts: 33,046 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    edited 7 November 2023 at 9:38AM
    Name the card & provider and someone will check.
    MBNA / LBG cards for instance will pay the new purchase first.
    Tesco & Virgin will pay off the first ending balance.
    So you need to check the individual terms for your card.
  • DocQuincy
    DocQuincy Posts: 246 Forumite
    Ninth Anniversary 100 Posts Name Dropper
    Thanks everyone. It's a HSBC Balance Transfer card.
    Before posting here I tried asking on their live chat but it has one of those infuriating AI bots and I ended up giving up and posting here.
  • DullGreyGuy
    DullGreyGuy Posts: 14,815 Forumite
    10,000 Posts Second Anniversary Name Dropper
    HSBC's current terms are that on equal interest rates they apply payments to the oldest ones first. 
  • molerat
    molerat Posts: 33,046 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    6.3
    Sometimes amounts are charged at the same interest rate. If that’s the case, we’ll apply your payment to the oldest amounts first.

    HSBC Credit Card Terms and conditions   dated 2022



  • DocQuincy
    DocQuincy Posts: 246 Forumite
    Ninth Anniversary 100 Posts Name Dropper
    Thanks everyone!
Meet your Ambassadors

Categories

  • All Categories
  • 347.2K Banking & Borrowing
  • 251.6K Reduce Debt & Boost Income
  • 451.8K Spending & Discounts
  • 239.5K Work, Benefits & Business
  • 615.4K Mortgages, Homes & Bills
  • 175.1K Life & Family
  • 252.8K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16K Discuss & Feedback
  • 15.1K Coronavirus Support Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.