[jeff43]

I've received an offer of a 0% transfer on my credit card. It includes this information:"Until you repay your transferred balance in full you will be charged interest on any purchases you make, even if you pay off the full purchase balance each month (unless you have a 0% rate on purchases)." But on the reverse of the statements it says any payments made will be allocated to higher interest bearing amounts first. So shouldn't payments clear purchases first even while the transfer is in operation? Which of these is correct?

[ScottW]

That only applies if the full statement balance of the account is cleared. In this case, you would still pay interest as the full balance (the transfer and the purchases) wouldn't be paid off, only the purchases. The interest on the purchases is calculated based on your average daily balance and applied to your statement monthly.

[ScottW]

Hi , thanks for your question. Any payment you make will be automatically applied to the parts of your balance that attract a higher rate of interest, but unless your full balance is cleared in time and in full, then interest will still be applied. This is because part of your balance, in this example the purchase part, isn't covered by a 0% interest period and is accruing interest on a daily basis.



If you paid off the purchase amount and the accrued interest over a two statement period, then no further interest would be applied unless further purchases were made. I hope that helps, but please get back in touch if you have any other questions - Scott

[sarah_d]

Hi . I hope this answers your question, can I ask that you accept the solution please so that it is stored for other customers? Thanks

[jeff43]

Sorry, I'm still not quite clear on this.I pay off my purchases every month so I pay no interest.If I take out a 0% balance transfer offer and I continue to pay off my purchases every month will there still be no interest to pay even while the transfer balance is outstanding?

[ScottW]

Unless the full account balance is paid off, then interest would still accrue and be added to your monthly statements. This would only be in relation to purchases or other transactions that aren't covered by any 0% rates. I hope that makes it a little clearer for you .

[jeff43]

There is no interest on purchases if they are re-paid by the due date on the statement. Does that still apply when there is a balance transfer amount outstanding?

[yrfam]

No it is very misleading. The transfer is not 0% because if you have a balance transfer outstanding you have to pay interest on your purchases even if you pay them off each month. In effect actually, in effect, paying interest on your balance transfer.