[Credit] Balance transfer interest question
I currently have two credit cards, one with Nationwide and one with Lloyds. I had to make a ~£500 purchase a couple of months ago and wanted to spread it out over a year, and I saw that my Lloyds card was offering me a 0% interest 3% fee balance transfer, so I paid on my Nationwide card and did the transfer.
Fast forward a few months, and I needed to make another £250 purchase. I saw that this time, my Nationwide card was offering me an almost identical 0% interest 2.9% fee balance transfer so I made the purchase on my Lloyds card with the intention of transfering the balance right away.
However, here's my question, my Lloyds card currently has ~£400 balance at 0% because of the balance transfer, and £250 at a higher interest rate of 11.2%. I just want to make sure that if I transfer £250 of that balance over to my Nationwide credit card it will be the £250 at the higher rate of interest that gets transferred.
Posted Aug 11, 2018, 9:14 PM UTC
Yeah it will be. By law all card companies now have to allocate all "payments" / credits (technically what a bt is) towards the balance or part of balance with the highest interest (so in your case 11% balance) first
Ah thanks very much! If heard about the rules saying that your payments should pay off the highest interest part first, but googling wouldn't definitely show me whether a balance transfer acted in the same way. Thanks for clearing it up for me!
There are cards with no fee for balance transfers & a 0% apr. You could check on money saving expert credit club if you qualify.
Be wary of debt!
I know there are :) These were both very sudden unexpected outgoings, I just haven't been able to build up any savings yet from moving house a few months ago so I had to use the couple of credit cards I do have. I'm a bit wary of applying for more credit cards at the minute, as I've relatively recently opened a new bank account, had credit checks for my gas/electric, internet, phone bills etc. I'll take the 3% fee as a hit for now and work my way back to getting some kind of emergency savings asap.
If you qualify, then you qualify. No point saving up your credit rating for a rainy day when it's already raining. But that's just my opinion, and my credit rating is shot from all the 0% debt I have.