Paying of balance transfers - problem with Halifax - please help

Kate9253 · 6 December 2019 at 10:58PM

Hello. I'm hoping that someone can give me advice.

I have a Halifax credit card that I got solely for make 0% balance transfers.
I currently have five different 0% balance transfers on the card, all expiring at different times.

The first one expired in November so I made sure I made a payment to pay off the remaining balance of that particular deal. However I've just noticed on my statement that I've had £128 interest added to my account (there was only £180 remaining to pay on that deal as it was!). I've phoned Halifax and been told that this is because they applied my payment last month to a different balance transfer which I took out at an earlier date (even though it doesn't expire until next year) meaning that I didn't succeed in paying of the one expiring in November in time.

My finances are in tatters at the moment anyway so this added £128 is a massive blow in itself.

But also I just don't understand how I'm going to clear each of the remaining balances before they expire if they aren't willing to apply payments to the balance transfer that will next expire. I'm already going to be hard pushed to find the money by each expiry date but I don't have a cat in hells chance if they then don't apply it to the one next due to expire.

Please help. I haven't got a clue what to do here. Because my affordability has plummeted I'm not in a position to take out a new 0% credit card to transfer my Halifax balance to (I previously had an MBNA 0% credit card where they applied payments in a fair and more useful way - how I wish I'd kept that card and not the Halifax one).

MallyGirl · 6 December 2019 at 11:05PM

Each card has its own T&Cs and they don't always work in the way you might have assumed. All you can do is follow the rules for the one you have got. Throw every penny at paying off the balance

Kate9253 · 6 December 2019 at 11:17PM

My statements don't even show the date I took out each balance transfer so they aren't giving me the information I need on the order that they will pay them off.

By comparing November and December's statements I can see that they are applying any payments to a balance transfer expiring in June 2020. But I have two other balance transfers expiring between now and then. There is no way I can pay off the June 2020 balance by the 18th of January which is when my next expiry date is.

I've got myself into such a mess. This is going to cost me hundreds, if not thousands in interest, given that they've charged me £128 interest the one that expired in November that only had £180 left to pay.

Ben8282 · 7 December 2019 at 2:54AM

You have not paid £128 interest on a balance transfer of £180. This is not a BNPL where they compound the interest.

Halifax apply payments to balance transfers to repay them in the order that they were taken out i.e. oldest first.
For each type of balance, your payments will pay off the oldest balance (and related fees, charges or insurance) first.
Therefore the total original amount of this balance transfer must have been £180 as if payments were still being applied to balance transfers taken out on earlier dates as you say, no payments would ever have been applied to this particular balance transfer and therefore it would never have reduced.

Assuming the £128 represents the interest charged for an entire month (i.e.interest was charged on this balance for one whole statement period) the balance on which interest was charged (assuming the standard Halifax APR of 19.95%) would have been approximately £7600. If this does not represent an entire month then the balance must be considerably more.

It is a shame that you never previously looked at your statements to determine to which balance the payments were being applied otherwise you would have known from the month after you took out the second balance transfer.

I am slightly curious as to how this situation came about. Presumably after you got the card and the 90 day initial period for making balance transfers was up you continued to receive existing customer offers for shorter periods which you then used to make more balance transfers.

The best solution to your problem, assuming that the cards from which these balances were transferred have existing customer offers available to you, is to transfer the balances again to the other card(s) before they expire. Alternatively, apply for a new balance transfer card to transfer the balances.

From the amount of interest charged the total balance of this card must be quite high so good luck in applying for a new card.

SnowTiger · 7 December 2019 at 3:22AM

Kate9253 wrote: »

The first one expired in November so I made sure I made a payment to pay off the remaining balance of that particular deal. However I've just noticed on my statement that I've had £128 interest added to my account (there was only £180 remaining to pay on that deal as it was!). I've phoned Halifax and been told that this is because they applied my payment last month to a different balance transfer which I took out at an earlier date (even though it doesn't expire until next year) meaning that I didn't succeed in paying of the one expiring in November in time.

How payments are allocated is set out in the card's T&Cs.

I have a Halifax Clarity card. The T&Cs contains this:

If there is more than one type of balance at the same interest rate, they are paid off in the following order: cash transactions, purchases, balance transfers and money transfers, and then default charges (plus any interest or charges incurred as a result of those balances). For each type of balance, your payments will pay off the oldest balance (and related fees, charges or insurance) first.

The last sentence is a gotcha for you.

Do you have another credit card? It may have a balance transfer offer for you, even if it's not 0%.

Nebulous2 · 7 December 2019 at 6:28AM

They have to use your payments to pay off the highest interest-bearing balance first. Whilst they can apply payments to earlier BTs once the date is past payments should go to the one carrying interest.

If you wait until the date has passed and then pay off the BT in full ( plus a few pounds for interest) you should get off with a few days interest. Repeat with other. BTs after they are due.

molerat · 7 December 2019 at 9:37AM

Interestingly up until May 2017 they used to split the balance transfers on the statement with the start date.

Kate9253 · 7 December 2019 at 11:44AM

Thank you for your responses.

Having had time to digest this I know that I am in the wrong for not having made sure that I understood the order in which payments would be applied. I've only ever used the cards for 0% transfers so I had thought the bit about payments going to the balance with the highest interest rate was irrelevant.

The £128 must be interest for the whole of the term of the balance transfer which will have either been 18 months or 24 months. At most that balance transfer would have been £2000. I'm still struggling to access the information on the website of when I made each balance transfer.

Clearly I have made a mess of this. It's bad timing as I had just made a plan to pay these balances off in order of expiry to ensure I didn't incur any interest when I had an email from my current account provider saying that overdraft interest on arranged overdrafts is jumping from 15% to 40%, so yesterday I replanned my finances to also try to pay my overdraft off by March.

Basically the fact that I have let debt build up like this was irresponsible and the fact that I didn't make sure I knew how the order of payments worked for balance transfers is also irresponsible. I KNOW this is my fault.

Can I ask what you think of this plan:

I have three credit cards.

My HSBC card has £600 capacity on it but the only balance transfer deal is at 12.9%

The other has £300 capacity and is offering 0% balance transfers with a 2.9% fee up until the end of December

Then there's the Halifax card which has £4000 of debt on it and in order to pay off the deal expiring in January I need to clear a £2000 transfer that expires in June first because of this payment order system. They are offering 0% balance transfer with a fee of 3.75%

Could I just keep doing a £600 balance transfer back and forth between my HSBC credit card and Halifax credit card until I clear the £2000 June expiry transfer. Then I could use money I've been putting aside to pay the £1300 deal that ends in January.

Obviously I know this is a short term sticky plaster but it will at least avoid me incurring massive interest on the January expiry transfer.

I have already curbed my spending massively and am selling things on eBay and Gumtree to raise funds to pay off the Halifax credit card.

Any advice or thoughts on my plan of action really would appreciated. I've now stopped burying my head in the sand but it is all a bit scary and I feel out of my depth.

eskbanker · 7 December 2019 at 12:29PM

Kate9253 wrote: »

Thank you for your responses.

Having had time to digest this I know that I am in the wrong

[...]

Clearly I have made a mess of this.

[...]

Basically the fact that I have let debt build up like this was irresponsible and the fact that I didn't make sure I knew how the order of payments worked for balance transfers is also irresponsible. I KNOW this is my fault.

That's a refreshingly gracious response! So many come on here shouting the odds and remaining defiant even when faced with clear evidence of their faults, so accepting the situation and coming up with a constructive plan to resolve it is laudable....

molerat · 7 December 2019 at 1:03PM

Kate9253 wrote: »

The £128 must be interest for the whole of the term of the balance transfer which will have either been 18 months or 24 months. At most that balance transfer would have been £2000.

Highly unlikely it is backdated interest, there must be something else at play here.

Kate9253 wrote: »

I'm still struggling to access the information on the website of when I made each balance transfer.

You should be able to get PDF statements going way back, mine are available back to Feb 2017 when I took the card.

nicobrum · 7 December 2019 at 2:55PM

I've online PDF statements available back to Oct 2012, I took the card out in about 2008 although didn't change to online only statements until August last year. Unlike other banks, Halifax don't let you see online CC statements if you don't opt out of paper ones, or that's what happened to me.

Paying of balance transfers - problem with Halifax - please help

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