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

DocQuincy

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.

MorningcoffeeIV

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

There is no standard approach where two balances are at the same rate.

DullGreyGuy

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

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

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

HSBC's current terms are that on equal interest rates they apply payments to the oldest ones first. 

molerat

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

Thanks everyone!