YACCIQ

[mzkhadir]

If I purchase Item A for 1000 dollars and it has a no interest for 1 yr ending in 2008 and then If I purchase Item B for 250 dollars it has no interest for 6 months ending in july. If I made payments, where would the payments go to, purchase A or B ?

Thank You

 

[VTHodge]

I don't think we can predict how your payments would be attributed. Read the fine print. If it isn't clear, call cust. service.

My guess would be that it would be proportional. 20% -> $250 and 80% -> $1000. Worst case is they would do what is best for them (100% -> $1000). Only safe thing to do is to pay it all off in the six months.

 

[Double Trouble]

No, it will not be proportional. Every CC company that I'm aware of inserts language into the agreements indicating that your payment will go towards paying off balances with the lowest interest rate first.

Lets say you put a balance of $10,000 on a card, with 0% interest for 1 year. Then you buy $5,000 worth of stuff and your regular rate is 12%, so you have a total balance of $15,000. Then, lets say you pay $5,000 toward the balance. What you'd end up with is:

$5000 balance at 0% for 1 year (or whatever remains of that year), and $5,000 balance that will incur interest charges at 12%.

That's how they like to trap you with those balance transfers. Once you put that balance on your card (and get 0% for a year or whatever deal), you should put that card away and not use it at all. Pay off the balance as fast as you can, but do not add any other purchases.

 

[shocksyde]

Yup, every credit card I have says payments will go towards lowest interest purchases first.