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Balance transfer

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USER

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Hi,

So i got this offer from Bankwest Mastercard 5.99% balance transfer for the life of the transfer.. Can someone explain/or knows how it works...? If i make purchases as well with that card.. do i still get the interest free days. I did read their conditions and the offer letter but it nowhere says balance transfer will be paid first or is this a norm which doesnt need explanation on paper?..

thanks all
 
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one9

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USER said:
Hi,

So i got this offer from Bankwest Mastercard 5.99% balance transfer for the life of the transfer.. Can someone explain/or knows how it works...? If i make purchases as well with that card.. do i still get the interest free days. I did read their conditions and the offer letter but it nowhere says balance transfer will be paid first or is this a norm which doesnt need explanation on paper?..

thanks all

Usually the special balance transfer interest rate is only for balances that are transferred from other credit cards. So if you also spend on the card, then your spending will immediately attract a higher interest rate.

If you use such offers, the smart thing to do is to not spend on the card at all until you have paid off the full balance.

BTW: There are some better offers available (I think National were offering 3.99%, but not sure if it is still on. And maybe I saw another better offer somewhere)... I don't use such offers as I always pay off my credit card in full.
 

NM

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You need to check with the CC provider exactly how they assign payments you make against the different types of credit provision. In most cases, they will assign any payments to make against the balance transfer first and when that amount is paid off you payments start to go against the usual purchases.

If that is the case, then you may find that the Mars bar you purchase using your credit card is accruing interest at 19% for the entire time it takes you to pay off the balance transfer. It is generally good practice to not use the card for any other purposes until the balance transfer is paid off completely.
 

oz_mark

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The order payments are applied are sometimes specified in the cards terms and conditions rather than with the offer. From memory though, Bankwest just say they will apply them in any order they feel like. Chances are payments will go against balance transfers first.
 

serfty

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What NM posted ...

Also, be aware that balance transfer vary a lot in relation to the period of the interest rate.

Some do it "For the Life of the Balance" which basically means that if you transfer 2000, the first 2000 you pay on the account is put against the initial transfer. Any interest, fees or purchases made attract interest at the higher rate.

Others (generally lower) rates are termed "honeymoon" transfers and the low interest rate ends after a periods (e.g. 6 months).

Other are a combination of both the above.
 
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