Halifax zero balance transfer is a joke

GINGERINDIAN

I regard myself as quite savvy when it comes to zero% balance transfers
I've had a Halifax credit card for some years which I used occasionally for purchases and always cleared balance.  One of my other cards zero % offer was coming to a close and rather than clear the balance I decided to move it to a 12 month 0% transfer offer on my Halifax card. £3700 transferred with £111 fee.
All fine until I made a purchase 2 months back.  When the statement came, I paid the purchase amount plus a little bit more towards the zero BT balance.  
Now this month, I start to see interest charges against the purchase I made.
They tell me the only way to avoid further 'trailing' interest charges is to pay off the full amount, including the zero % balance (which doesn't need clearing until May 2026)

I don't have this issue with Barclaycard, which has a zero BT running on it, but which I use frequently for day to day transactions (due to cashback offer).  With Barclaycard I always clear the monthly transactions + a little bit towards the zero balance.

How can Halifax get away with offering up a zero % balance transfer and not then apportioning monthly payments against interest incurring transactions first and now tell me the only way to avoid accruing daily trailing interest is to clear the whole balance (2 months into a 12 month offer period)?

eskbanker

I think Barclaycard is the exception here, rather than Halifax, but the trailing interest will be minimal in the second month and not applicable thereafter, if you don't make any further purchases.

GINGERINDIAN

Feel very cheated, and very thankful the transaction I made was a low value.  It's the priniciple that really bugs me!

eskbanker

GINGERINDIAN said:

Feel very cheated, and very thankful the transaction I made was a low value.  It's the priniciple that really bugs me!

It's the way that most cards work, and will be explained in the Ts & Cs - it's widely recommended not to mix BTs and purchases for this reason, as interest will generally only be waived if paying the entire balance, which is obviously not what most holders of 0% cards have in mind....

Isthisforreal99

You've not been cheated and not as savvy as you thought. As explained Barclaycard are the exception.

MyRealNameToo

GINGERINDIAN said:

I regard myself as quite savvy when it comes to zero% balance transfers
I've had a Halifax credit card for some years which I used occasionally for purchases and always cleared balance.  One of my other cards zero % offer was coming to a close and rather than clear the balance I decided to move it to a 12 month 0% transfer offer on my Halifax card. £3700 transferred with £111 fee.
All fine until I made a purchase 2 months back.  When the statement came, I paid the purchase amount plus a little bit more towards the zero BT balance.  
Now this month, I start to see interest charges against the purchase I made.
They tell me the only way to avoid further 'trailing' interest charges is to pay off the full amount, including the zero % balance (which doesn't need clearing until May 2026)

I don't have this issue with Barclaycard, which has a zero BT running on it, but which I use frequently for day to day transactions (due to cashback offer).  With Barclaycard I always clear the monthly transactions + a little bit towards the zero balance.

How can Halifax get away with offering up a zero % balance transfer and not then apportioning monthly payments against interest incurring transactions first and now tell me the only way to avoid accruing daily trailing interest is to clear the whole balance (2 months into a 12 month offer period)?

You only get an interest free period if you clear the balance in full each month is the norm, a small minority ignore any balance on 0% interest but they're the exception rather than the rule. 

You are however mistaken on what's happening, they are applying the payment to the interest incurring transaction first, they have to by law, but you are paying the interest incurred between when the payment was made to the retailer and when you repaid the card company because the full balance wasnt paid off. 

CliveOfIndia

As others have said, this is the way almost all credit cards work - because you didn't clear the whole statement balance, then interest on the purchase will continue to be payable.

Barclaycard is one of very few which separate out purchases from BT's.  For the vast majority of other cards, this is the reason why you should never spend on a BT card.

vacheron

I noticed something similar in a Sainsburys offer a few months back. 

https://forums.moneysavingexpert.com/discussion/6588783/sanity-check-do-the-ts-cs-of-this-sainsburys-bt-mt-offer-make-sense

As I usually use my BT cards exclusively to transfer balances (and then lock them in the safe until I shred them), I also hadn't had to consider this before, but as this offer was on a card I already used daily, I asked a similar question. 

I subsequently passed on their offer due to the complexities these clauses presented.

zagfles

You're not as "savvy" as you thought 

They will be allocating monthly payments to the interest incurring transactions first (ie the spending). But that's not the issue. The issue is you'll be charged interest on the purchase from when you made the purchase until you pay it off. 

You need to understand that the normal rule with credit cards or any loan is you pay interest on what you borrow from when you take the loan till you pay it off. Credit cards have a specific exemption to this, where if you pay your balance in full you aren't charged any interest. So because you didn't pay the balance in full, you get charged interest on the purchase from the purchase date to the payment date. 

Barclaycard (and Nationwide IIRC) are different in that they apply the "paid in full" interest exemption if you pay in full excluding 0% promotional balances. So you're OK spending on these card and paying the spending off each month. 

The summary box on the credit card will tell you. For instance with BC in the interest free period section it says you pay no interest "....if you pay your main balance (excluding any promotional balance with a 0% interest rate)...". I suspect Halifax doesn't have the bracketed bit. 

You don't need to pay off the entire balance. The first month you'd get charged interest from the purchase date till the statement date, the second month you'll get charged interest from the statement date till the payment date, the third month you may get charged a few pence interest (interest on the interest) but then it should be zero or trivial. If you've only just had the first month's statement, pay the spending asap to minimise interest, don't wait till the due date.