Balance transfer credit cards – spending money and not being charged interest
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As many of you I’m sure also do, I have two credit cards opened entirely to transfer large balances, taking advantage of 0% interest for X months offers, in order to provide me with additional short term liquidity.
I don’t normally spend at all on such cards. However, I have begun to do so on one such, which is a Sainsbury’s Bank card, because it is advantageous when Sainsbury’s or Argos is the merchant.
Unfortunately, I no longer have a 0% interest offer on new spending, so I must pay off *new spending* in full each month. The vast majority of the balance, however, is a balance transfer that still benefits from 0% interest, and so I don’t want to pay that part off.
I therefore want my Direct Debit set neither to the minimum amount (as it usually would be), as that’ll now generate interest; nor to pay the full amount, because I don’t want to; I want to pay the minimum on the balance transfer element, and the full amount of the new spending element.
Is there any automated way that I can do this, or is it a matter of leaving the DD on minimum, and then manually making an additional payment each month once statement is generated?
Any tips very gratefully received, as I had not anticipated this monthly inconvenience.
After the 0% period, it may be more fruitful to abandon and cancel the card and start the cycle again.(either by clearing balance and starting from 0, or by sucking up a balance transfer fee and continuing to build the debt balance).
It may be short term pain, but probably more long term gain from cancelling and getting the card again. After the suitable break period.
@Crafty are you sure your payments will go against new purchases rather than the balance transfer amount? I’ve had a mixed bag when trying to muddle these things in the past, as they’ve pro rated any payment proportionally across balance types.
No automated way of doing what you describe AFAIK
No automated way, but your statement should say the amount spent that month. Subtract the direct debit from that, and that’s what you need to pay. Check your terms to see if they will always take the amount of the DD in the statement, or if they reduce the DD by the amount you pay manually. In that case, you need to time your additional payment correctly or pay the full amount early enough.
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