Credit Card Payment Allocation

Steamboat

I have a Credit Card with a 0% balance transfer balance and i use it for a few smaller purchases. 

I understood any payments i made would go against the most expensive debt, i.e anything i have purchased which is on a normal interest charge. 

When i look back over the last year i can see various deductions from the 0% balance even when i have a purchased and chargeable balance from the last statement. 

Am i missing something? 

TheSpectator

What do your Terms and Conditions say about payment allocation?

The general advice is not to mix balance transfers and purchases as it gets messy. The general rule of thumb is that payments are allocated to statemented transactions first.

Steamboat

The statement says it will be allocated in a specific order set out in the summary table, assuming that means its in order of the table line by line which goes Purchases, Advances then Intro Balance Transfer.

But i can clearly see where on a statement i have £200 purchases balance then ive paid £200 but that hasn't all gone against that purchases balance, I cant imagine they've got it wrong, but i cant understand how its been done either. Could be timing but im paying the statement after its been created.

I will call them, just looking for initial thoughts 

zagfles

Just to be clear, you're only paying purchases off after they've appeared on the monthly statement? Payments will always go towards statemented amounts before unstatemented whatever they are.

Have you had any refunds? Have you been charged interest? 

Steamboat

Yes only once statemented and yes ive had interest charges (no refunds). 
It wasnt big enough to worry about, i just assumed i was getting the timing wrong but this month should have been clean and the balance didnt clear so i looked back at the last 18 months and found various allocations i wouldnt have expected. 

zagfles

Are you spending less than the min payment? If so you have to pay off some of the 0% balance. 

Your card could charge interest as some only have the "full payment exemption" for interest if you pay everything in full, others exclude promotional balances. The summary box should clarify. What card is it? 

Steamboat

Generally spend is higher than minimum and ive been paying up the difference. But looking back 18 months theres always been a purchase balance albeit small, that id expect the payments to go against. 
Its a Natwest BT Credit Card from last year.
I cant see any mention of full payment.

zagfles

Steamboat said:

Generally spend is higher than minimum and ive been paying up the difference. But looking back 18 months theres always been a purchase balance albeit small, that id expect the payments to go against. 
Its a Natwest BT Credit Card from last year.
I cant see any mention of full payment.

If you've made purchases then there's always going to be a purchase balance on your statement, your spending the previous month! It looks like NatWest don't exclude BTs from the full payment requirement to avoid interest. Their summary box says

Summary box | Balance Transfer card | NatWest
"You will not pay interest on new purchases if you pay your balance in full and on time, and have paid the previous month’s balance in full and on time. If you don’t do this, we may need to make an adjustment to include interest for purchases on your next statement. Otherwise, interest is charged on all types of transactions from the date they are debited to your account until repaid in full."

Compare with eg Nationwide who say "You will not pay interest on new purchases if you pay your statement balance, excluding any promotional balance transfers, in full and on time.". Barclaycard are similar

So it's not a good card to use for spending while you have a BT on it as you're paying interest on all your purchases. Better using a different card for spending. 

Steamboat

Thanks for your input Zagfles. 

I've called them today, worryingly they agreed with me that the allocation wasn't right and have given me a refund for the interest charges and an interest waiver while the purchase balance gets cleared so it doesn't happen again. I'll stop using it for purchases anyway. 

Its only small interest charges but i wonder how many people that happens to regularly. 

surreysaver

Steamboat said:

Thanks for your input Zagfles. 

I've called them today, worryingly they agreed with me that the allocation wasn't right and have given me a refund for the interest charges and an interest waiver while the purchase balance gets cleared so it doesn't happen again. I'll stop using it for purchases anyway. 

Its only small interest charges but i wonder how many people that happens to regularly. 

Probably more than likely you have been charged correct, but the member of staff you spoke to doesn't understand it.
Just don't spend on a card with a balance transfer on it, unless it's Barclaycard or something where you can mix and match