Credit Card Question

LSainsbury · 27-02-2011, 20:10

Hi,

My credit card has the following promotion item:

0.0% until 2 November 2011 on any new card purchases from £250.01 completed before 30 April 2011.

The other week I purchase an item which was over £250.01 - this was a ring - and yes she did say yes!

I've also purchased an item under £250.01.

How can I make sure I'm pay off the the item / amount that will start accruing interest first? Or does it not work that way?

Peter_ · 27-02-2011, 20:15

All it means is the item over £250.01 will have Zero interest until 2 November that is all whatever you pay will just come off the total amount owed until that date, it is basically a loss leader to draw you in which worked.

But apart from that congratulations.

martyh · 27-02-2011, 20:16

I have no idea about your credit card as i don't use them but congrats on your engagement (presumably)

LSainsbury · 27-02-2011, 20:21

Quote:

Originally Posted by Masque

All it means is the item over £250.01 will have Zero interest until 2 November that is all whatever you pay will just come off the total amount owed until that date, it is basically a loss leader to draw you in which worked.

But apart from that congratulations.

Hi,

Yep - I understand about the 0% until such date....it's the but under the £250.01 I'm concerned with.

Say the item was £100 - and pay £150 this month - is that £100 item paid for which will no longer gain interest and £50 off the rest of the balance - which all of it is on the 0% offer....

And thanks! :-)

27-02-2011, 21:05

i imagine it will go off whaich was spent first

You may be able to tell them how to allocate the funds? get in touch

TheDaddy · 27-02-2011, 21:38

Quote:

Originally Posted by ooogemaflop

i imagine it will go off whaich was spent first

You may be able to tell them how to allocate the funds? get in touch

Unlikely, if Lee looks on the back of his statement it'll give him a breakdown of how his bill is paid, for instance cash advances are always paid of last regardless of how old the debt is so if you have a £300 balance £200 of which is from a cash advance from several months ago and £100 of which is general expence from this month and you pay £150 towards it only £50 will go towards clearing the cash advance, the system is designed to make as much cash for the bank or credit card company as possible.

Other than that, congrats on the engagement Lee

**Paul M** · 27-02-2011, 21:43

I believe the law was changed such that the highest interest rate items had to be paid off first ? Something along these lines anyway. Im pretty sure most of my CC T&C's have been updated in the last few months because of this.

TheDaddy · 27-02-2011, 21:47

Quote:

Originally Posted by Paul M

I believe the law was changed such that the highest interest rate items had to be paid off first ? Something along these lines anyway. Im pretty sure most of my CC T&C's have been updated in the last few months because of this.

Mine haven't been...

**Paul M** · 27-02-2011, 22:01

I managed to find this article.

http://www.thisismoney.co.uk/credit-..._page_id=53936

Quote:

Under the new rules, their monthly repayment will go towards paying off the most expensive balance first – for example the rate on cash withdrawals – meaning debts will be paid off more quickly in the long-run.

TheDaddy · 27-02-2011, 22:11

Quote:

Originally Posted by Paul M

I managed to find this article.

http://www.thisismoney.co.uk/credit-..._page_id=53936

Thanks Paul that's interesting

My allocation of payments is as follows

If you do not pay of your balance in full each month payments recieved will be applied in the following order:

1. Interest on special offers
2. Other interest and fees
3. Special offers
4. Purchases and balance transfers
5. Cash advances and money transfers

No prizes for guessing which one they charge most for grrr

Tali · 01-03-2011, 13:21

My cards tend to allocate payments to the lowest interest rated item first, so 0% interest offers then purchases then cash advances, just like TheDaddy's.

Virgin Money's card clears items with the highest interest rates first however. This changed a couple of months ago.

Taf · 01-03-2011, 14:09

My CC (MBNA) also states that the minimum monthly payment will increase "so that your total interest is reduced".

**Matt D** · 01-03-2011, 18:52

Congrats, Lee

Quote:

Originally Posted by Taf

My CC (MBNA) also states that the minimum monthly payment will increase "so that your total interest is reduced".

Yup, mine too (via Virgin Money). They're "standardising" them all, so that older agreements use the same system that new ones do. Used to be Interest + £5, now it's Interest + 1% of the balance