We transfered all our credit cards into a good 0% APR.
Last week I charged something on the card, and plan to pay the full amount next time the bill comes. (New purchase has a 7% interest fee.)
My question is, if I pay the full amount of the purchase, will they apply it to the main balance not differenciating between the 0% and 7% amounts ? Can I request that the money I pay be applied to the new purchase?
I never thought about this before…!
It depends on THEM. When the bill is due, check the details
on the back.
One theory is the amount up to $xxx.xx is 0% while any
outstanding balance beyond that gets interest applied.
Short answer, no.
Long answer…payments on credit balances go in this order. Cash advance fees (if applicable),cash advance interest (if applicable), cash advance balances ( if applicable), purchase fees, purchase interest, purchase balances. That’s why it takes so long to pay the balance down if you only pay the minimum payment.
Also, speaking from experience, the payments area in any major bank is as automated as possible. A payment check can go from being received in the envelope to being posted to the account without being touched by a human hand. One machine opens the envelope, another optically reads the check and matches it to the statement. And the amount is applied to the account as I described above.
ummm… Good to know.
Thank you!
The “financial advisor” in the local newspaper gives this fatuous advice on these low percentage offers: Take them and be sure to tear up all your other credit cards. My advice: take them and continue to use your other credit cards (and pay off the whole balance every month on those other cards). Meantime, pay down your 0% card at whatever rate is comfortable, but be sure to pay at least the minimum on time every month since otherwise your 0% rate is likely to baloon up to 20% or whatever the fine print says. Of course, if everyone did that, those 0% offers would soon disappear. But they are designed to suck you in and you have to avoid that.
I hate to be a cynic, but every offer I’ve ever seen like that, the credit card company applies the payment to the lower-interest principal first, whether that’s new purchases or balance transfers. It’s somewhere in the fine print on your statement.
Like others have said, if you use a card for a good promotional rate, don’t use the card for anything else.
Carine, you didn’t say which card you have so I had to look around the net for various cards & their rules & here is the Discover Card info on that 0% rate:
"Balance Transfers: 0.00% until the last day of the billing period ending during December 2003*, thereafter the standard APR for purchases.
Default Rate:
19.99% or 24.99%*
Boy, those are sure high 
But if you gave us the card type it would be better for me so I can look up their policies on the net.
I am hoping to pay it off fairly shortly!
But I might have a couple of bill cycles before I do so.
Thank you Hari.
It is a Chase card handy. Thank you for searching.
I will try to call them and see what they can do. or not do…!
My VISA card through my employer’s credit union actually had a clause in the contract stating “We will apply your payments to whatever part of your balance we choose.”
Guess what part a bank will choose to apply it to?
But the APR is good, and mine is all at the same rate, so it doesn’t bother me.