Paying off an old BT, with a BT - allocation of payment HSBC visa?

MeeMawTucker

I have a HSBC card with a 0% BT of £1500 expiring Jan 2025, and 0% purchases of £3500 expiring May 2025. I want to BT the amount expiring in Jan 2025 to another card and have an offer to do this.

My question is: will the BT amount automatically apply to the amount expiring in January? My other card (Barclaycard visa) clearly shows eg the minimum amount paid coming off the earliest/oldest interest-free amount owed, which makes sense. But my HSBC statements still have the £1500 original BT amount has not decreased, despite minimum payments paid. 

molerat

The T&Cs state payments will be made against the oldest amount

6.2
In each case we apply payments first to amounts that we charge the highest interest rate on before we apply them to amounts charged at lower rates or zero interest. We always pay off interest and charges first.
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. If you have more than one instalment plan we’ll apply the payment against them in the order they were added to the account, starting with the plan that has been on the account longest.

MeeMawTucker

Thank you! The T&Cs were on a link that - when I tried to reactivate it - said they had now been removed under a document retention policy. I guess maybe the reason that minimum payments made so have come off the interest free purchases and not the balance transfer is that they are both the same “age” ie started when I got the card. 

I imagine therefore I’ll have to be very careful as to when I request the BT - to make sure it is within the period when interest is about to kick in. That may scupper my plans!

Brie

So if you did the purchases in June and July and did the BT in August the purchases will be paid off first.

So if the BT offer expires 10 Jan 2025 and the purchases are 0% until May the thing to do is wait until the 11 Jan 2025 to do the new BT to clear the BT already there.  The money will arrive on the account a couple of days later - maybe the 13th - at which point that BT will be accruing interest at some high rate like 28%.  Because it is accruing at a higher rate that the purchases which are still 0% any payments made MUST be allocated to the higher interest BT.

One way to check on this is to look at your card statements - normally (except on my M&S card) there is a section that shows what interest is being accrued for what balances and when that interest rate will end.  It will also show that certain balances are decreasing with each monthly payment.  

MeeMawTucker

Oh yes thank you @Brie for laying it out - that makes perfect sense. 

The new BT offer I have runs out before that date of the 0% on the balance I want to pay off, so it looks like that won’t work out for me. I might get another offer though so will have to keep my eyes open…