what is payed first

Bog_Brush_2

Hi first post

I have a virgin card with £1800 on it and a RBS card with about £5000 on.
I have been offered a deal with the virgin card 0% balance transfer for 9 months.
If i move my RBS over to Virgin what is payed off first, the 0% balance or the £1800 at the higher rate and if i were to balance transfer from Virgin to another card at a later date would it be the higher rate or the 0% that gets transferred. In short should I move the £1800 off virgin to another card before I opt for the 0% transfer to virgin.

sorry if this is a bit confused

regards

Bog Brush

Stardust77

Hi Bog Brush,

Although I don't know specifically, the majority of the banks bar one or two always allocate payments to the special offers first so the higher rate balance will be accruing interest for as long as it takes to clear your balance.

Payment allocation is normally on the back of the statements or possibly on the t&c's on the cards website.

Moggles_2

If I move my RBS over to Virgin what is paid off first, the 0% balance or the £1800 at the higher rate?

The 0% balance, unfortunately. Your £1800 would remain trapped on the card attracting interest at your standard rate, which is variable. (In other words, Virgin could raise the rate even higher.)

... and if I were to balance transfer from Virgin to another card at a later date, would it be the higher rate or the 0% that gets transferred?

The allocation of any payments would be the same regardless of whether the funds came from you or another card company.

In short, should I move the £1800 off Virgin to another card before I opt for the 0% transfer to Virgin?

Yes.

CannyJock

Bog_Brush wrote: »

In short should I move the £1800 off virgin to another card before I opt for the 0% transfer to virgin.

Yup. In your shoes I would:
1. move the Virgin to the RBS or another card, anywhere infact
2. Get a nil balance statement from Virgin
3. Call Virgin to confirm the 0% offer still stands, ask them to extend the 0% period to 15 months (no harm in asking they offer it to new customers), ask them to waive the 2.98% fee (or confirm there isn't one, again a bit of cheek but no harm in asking), ask them for a credit limit increase if necessary so you can put all your balances onto it.
4. Move the original Virgin balance plus as much of the others as you can, back onto the Virgin card.
5. Be sure to set up a direct debit to repay at least the minimum from the Virgin card because if you miss a payment then you lose the 0% offer
6. Once the balance has been transferred onto it, lock it away and forget about it, do not use it for purchasing under any circumstances

Bog_Brush_2

Ok this is what I have done hope it it is correct. I have moved the £1800 on my virgin this morning to my partners card who has 0% for 6 months. Virgin have said that they will ring back on saturday when that will be the last chance to accept the 9 month 0% deal, so if i except will the transfer this morning come off the card before the new balance goes on. What I mean is once virgin have the balance transfer details will it be on the card or does it still take the same 5 to 7 days to appear on the card, or should I not do the balance transfer and hope that they will offer me another deal once i get a zero statement.

CannyJock

Hopefully others can correct me if I'm wrong here, but I don't think they allocate payments until the "end" of a statement period.

What' I'm thinking is that they are trying to catch you out on the 0% offer here and you end up with a statement that will basically show you:

1800 @ 17.9% APR (or whatever)
1854 @ 0.00% APR (assuming you pay the 3% fee from your partner's card!)
-1800 (payment from "balance transfer")

Following their standard "allocation of payment" procedure, they will match the balance transfer payment against the 0% debt, so you're no better off.

You need to get a nil balance statement first. I would wait till I got one, then phone Virgin and ask for a balance transfer deal to move the debt back - don't be pressured into jumping on a deal before Saturday, deals can always be had if you're willing to ask for them.

Meanwhile, make sure you make the payments on your partner's card while it's at 0%