Credit card payment question?

[V8 Stang]

So if i have a credit card with a 0% balance on it from a money transfer.

I then make some purchases on it, then make a payment to the value of these purchases after next statement.

Does this payment just pay off these purchases, leaving the 0% balance?

Or will it pay off part of the 0% balance, leaving the recent purchases at high interest %?



Basically i did a money transfer to get the cash to pay off car finance to sell the car, after selling put the cash into high interest savings account until the 0% deal is up, will then pay off in full.

However its my only card that does not charge for foreign exchange while abroad, so i want to make holiday purchases on it, pay off the purchases, and be left with just the 0% balance on the card?

Can anyone advise?

Cheers

[Somebody]

Check the Ts&Cs as to the order in which your payment is applied to the outstanding balance relative to the new purchases/balance transfer amounts.

Santander, for example, will charge interest on the new purchases even if you make a repayment to cover the cost of the purchase.

[Panamax]

Check the Terms and conditions or FAQ. For example, this is the way it works for one well known credit card,

"The 0% offer period lasts for 6 calendar months from the date of transfer." So in this case it sounds as though the transferred balance remains interest free for six months.

But they go on to say, "If you usually pay your balance in full each month: Balance Transfers can affect your interest free period for purchases. Carrying a balance means you'll be charged interest on any new purchases straight away. Once you clear your balance in full (including your Balance Transfer), you'll go back to having an interest free period."

In other words, you will pay interest every month on everything you have bought that month.

[V8 Stang]

Thanks, will have a look and see what it says. Its Virgin Money.

[V8 Stang]

OK, so from my understanding of these terms it should be fine?

[Panamax]

How does Virgin Money allocate payments?

9.5 Interest will be applied for the period between the statement date and the payment date and added to the next month’s
balance (on which interest is then charged), unless you pay your full balance each month and your balance was made up only of
Card Purchases and/or instalment plans.

12.1 We will allocate your payments in the following way:
> Firstly, to your Minimum Payment in this order:
> any default charges, interest, annual card fee, and non-instalment plan balances, with the highest interest rate first, before repaying those on lower interest rates, and then,
> etc

Note that Virgin's interest rate is a bargain-basement 25% () and if you ever fail to make at least the minimum payment in any month then interest will start to run on the entire balance.

[Panamax]

V8 Stang said:

OK, so from my understanding of these terms it should be fine?

You need to check out exactly what terms are set out in the offer they have made to you. I can't see anything in the standard terms that covers the duration of your interest free period or how it specifically works.