clear purchase after balance transfer?

pinkstellacat

My partner currently has a virgin credit card which he has a purchase of £600 on at 0% interest.

He wants to pay off his overdraft by using a balance transfer cheque, however the 0% on purchases will end before the 0% on bt so I've warned him not to do this...

He has now had the idea that he could write a bt cheque to pay his overdraft off for the od amount plus the £600 purchase amount. This would then give him £600 credit in his bank account to pay off the purchase amount on the card, thus leaving only a bt amount on the card and therefore everything remaining at 0% for the longer period of time.

Does this actually work in practice? or would he actually need to clear the card completely to remove the purchase amount to avoid being charged interest on it? More to the point, have I made any sense at all in what seems to have become an incredibly complicated explanation!!

Coupon-mad

Yep, you have made sense and you are right, he should listen to you!

He can't do what he wants until he has cleared the £600 purchase, he will pay interest on the purchase otherwise. If he does what he suggested as his 'plan B' then that won't work either because the bit that he pays off will pay off any promotional balance first (i.e the BT he will have just done!).

Credit cards invariably clear the bit that's at the cheapest/free rate first, when you make a payment.

Does he have enough of an authorised overdraft at a low enough rate, to clear the purchase this month by adding it temporarily to his overdraft? Then once he has had his Virgin statement showing the balance is nil, he could do a Super BT to his Bank account for the whole lot if he has the credit (you can't draw BT's right up to the credit limit I don't think, usually to 90% or 95% of credit limit. He should make sure this is going to be possible before upping his overdraft of course).

HTH

madonss

Unfortunately, neither of his ideas will work.

The BT cheque will appear on the CC statement before it has a chance to clear into his current account and get paid of the CC balance.

pinkstellacat

thanks both of you for your replies... I've told him about it and he's considering either paying off the cc with his overdraft then bt his overdraft once it's clear... or he's got such a good credit rating (he only has the one card) that I've suggested he could even just open another card and keep the existing one for purchases...

Overall though... initial query sorted... thanks! :T