Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@. Skimlinks & other affiliated links are turned on

Search
  • FIRST POST
    • Jello123
    • By Jello123 12th Jun 19, 10:43 AM
    • 22Posts
    • 0Thanks
    Jello123
    Confused with billing cycle
    • #1
    • 12th Jun 19, 10:43 AM
    Confused with billing cycle 12th Jun 19 at 10:43 AM
    Hi

    I have used credit cards in the past when they had 0% interest free purchase periods. But I always paid off the balance months before the promotion period ends. So I have never encountered or worried about interest being charged.

    At the moment, I have a MBNA card with £1000 balance which was a money transfer. Itís 0% for another 20+ months.

    I have been making purchase last few months with the aim of clearing the balance before being charged interest. But my last statement had interest charged. So I am obviously doing something wrong!

    My statement on 23 May said I had £1000 money transfer balance at 0% for another 20 months. It also said I had £500 worth of purchase at 1.445%. Which it charged me interest for. Some of these may have been from the previous month. Payment due on 17th June.

    I made a payment the next day on the 24th May of £550 thinking it would clear the debt on my purchases. My regular DD is still scheduled to go out on 17th June which I assumed will be used towards the money transfer debt as the purchase debt is already paid off. Is this correct?

    On 28th May i made a purchase of £250 on my credit card for a holiday deposit (I wanted the credit card protection).

    When should I pay the £250 off on order to not be charged interest? Do I pay it now? Or should I wait for my June statement and pay it off then?
Page 1
    • zx81
    • By zx81 12th Jun 19, 10:53 AM
    • 23,850 Posts
    • 26,539 Thanks
    zx81
    • #2
    • 12th Jun 19, 10:53 AM
    • #2
    • 12th Jun 19, 10:53 AM
    If you don't clear the entire balance in full, you'll always be charged interest, which is why you're not able to avoid the interest on purchases.

    Your payments will go the highest rate STATEMENTED balance. So you need to bear that in mind when making interim payments.
    • BoGoF
    • By BoGoF 12th Jun 19, 10:58 AM
    • 5,313 Posts
    • 5,188 Thanks
    BoGoF
    • #3
    • 12th Jun 19, 10:58 AM
    • #3
    • 12th Jun 19, 10:58 AM
    For good reason the general advice is don't mix spending and transfers on a balance transfer card.
    • Sncjw
    • By Sncjw 12th Jun 19, 11:19 AM
    • 2,235 Posts
    • 1,360 Thanks
    Sncjw
    • #4
    • 12th Jun 19, 11:19 AM
    • #4
    • 12th Jun 19, 11:19 AM
    You are paying interest on the purchases to are making. The 0% interest is for the amount you used for money transfer.
    • 18cc
    • By 18cc 12th Jun 19, 11:34 AM
    • 1,841 Posts
    • 1,361 Thanks
    18cc
    • #5
    • 12th Jun 19, 11:34 AM
    • #5
    • 12th Jun 19, 11:34 AM
    There are two important dates on a credit card the statement date and the payment date.

    When your statements arrives you will see how much the statement balance is. if you pay it off in full by the payment date then you won't be charged interest on your purchases that month. if you don't pay it off in full then you will be charged interest on everything even the amount you have paid off

    So for example if you make £1,000 worth of purchases that month and your statement arrives and shows £1,000 balance and you pay £999 by the payment date leaving a £1 balance you will be charged interest on the full £1000 purchases
    • Jello123
    • By Jello123 12th Jun 19, 12:43 PM
    • 22 Posts
    • 0 Thanks
    Jello123
    • #6
    • 12th Jun 19, 12:43 PM
    • #6
    • 12th Jun 19, 12:43 PM
    I am still a little confused...

    When you say I must pay off the full statement balance before the due date, do you mean the actual full balance OR just the portion that relates to purchase? Seeing as the purchase element has interest attached to it but the Money transfer portion does not?
    • zx81
    • By zx81 12th Jun 19, 12:46 PM
    • 23,850 Posts
    • 26,539 Thanks
    zx81
    • #7
    • 12th Jun 19, 12:46 PM
    • #7
    • 12th Jun 19, 12:46 PM
    The full balance, if you intend to avoid interest.
    • Jello123
    • By Jello123 12th Jun 19, 12:51 PM
    • 22 Posts
    • 0 Thanks
    Jello123
    • #8
    • 12th Jun 19, 12:51 PM
    • #8
    • 12th Jun 19, 12:51 PM
    Wow I did not expect that. I see why BT and purchases should be kept separate.

    Ok so say the statement arrives and I pay the purchase balance of £500 + a little extra to cover interest charges, would it mean that I wonít be charged interest the following month as my balance would now only include the money transfer?
    • zx81
    • By zx81 12th Jun 19, 1:00 PM
    • 23,850 Posts
    • 26,539 Thanks
    zx81
    • #9
    • 12th Jun 19, 1:00 PM
    • #9
    • 12th Jun 19, 1:00 PM
    There will normally be some trailing interest the following month. After that, assuming you don't add any more purchases, there should be no more interest.
    • Jello123
    • By Jello123 12th Jun 19, 1:22 PM
    • 22 Posts
    • 0 Thanks
    Jello123
    Cool.

    What happens if I make a payment of £500+ a little extra right now?

    My statement is generated arround the 22nd each month. Payment due is usually 15th the following month.

    So I am expecting a statement on 22 June with a payment date of 15 July.
    • MallyGirl
    • By MallyGirl 12th Jun 19, 1:56 PM
    • 3,976 Posts
    • 9,420 Thanks
    MallyGirl
    payments are applied against the statemented transactions so if the transaction hasn't appeared on a statement yet you may end up paying off some of your 0% BT and still having the interest incurring transaction there Just wait for the statement - pay enough to cover the interest and purchases, then next month pay any trailing interest. Do not use the card for any more purchases.
    • Willing2Learn
    • By Willing2Learn 12th Jun 19, 2:12 PM
    • 4,438 Posts
    • 3,986 Thanks
    Willing2Learn
    @Jello123


    I accidentally used the wrong card when I was in Tesco a couple of months ago. I unintentionally used the BT card instead of the purchases card.

    This is what I did to rectify the problem:
    • I paid the minimum contractual payment on the next statement plus the full amount of the accidental purchase.
    • I paid trailing interest the next month.
    • The following statement was interest free and I still have the BT balance on the promo.
    Hope this helps
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    • Jello123
    • By Jello123 12th Jun 19, 3:58 PM
    • 22 Posts
    • 0 Thanks
    Jello123
    payments are applied against the statemented transactions so if the transaction hasn't appeared on a statement yet you may end up paying off some of your 0% BT and still having the interest incurring transaction there Just wait for the statement - pay enough to cover the interest and purchases, then next month pay any trailing interest. Do not use the card for any more purchases.
    Originally posted by MallyGirl
    Thank for the reply. This is what I was afraid of - I.e. paying off the BT rather than the purchase.

    The purchase IS showing on my recent transaction page, but obviously not on my statement as I have had the latest statement yet.

    I guess if I make any payments now, it will go toward the BT. So best to wait for the statement, then pay off the full amount for purchase + minimum payment + a bit more to cover any interest.
    • Terry Towelling
    • By Terry Towelling 12th Jun 19, 7:37 PM
    • 1,983 Posts
    • 1,680 Thanks
    Terry Towelling
    This issue of mixing BTs and MTs with general spending does catch a lot of people out - especially those who like to pay before they get a statement.

    For clarity, there are some card issuers (Barclaycard and Nationwide are two) who keep promotional balances and new spending separate. If you get a statement with a 0% BT/MT on it and, say, £100 of new spending, then as long as you clear that £100 of new spending (and meet the minimum payment amount), you will not be charged interest.
    Last edited by Terry Towelling; 13-06-2019 at 2:38 PM. Reason: Reference to deleted post removed
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

2,158Posts Today

8,817Users online

Martin's Twitter