cancel
Showing results for 
Search instead for 
Did you mean: 

How is interest charged on purchases after balance transfer?

tag
Jazzzy
Valued Contributor

How is interest charged on purchases after balance transfer?

Please help me understand how credit card companies handle interest on purchases after you transfer a balance. When trying to get you to transfer a balance to their card, usually in big letters they will tout the 0% interest for however long, etc. Then....following that pitch in small letters.....it says, "...after the first Balance Transfer posts to your Account under this offer, then your purchase APR will apply, currently 11.99%. (or whatever your current interest rate is)."

 

Does that mean that you can no longer have any float time on your purchases....that interest on your purchases starts to accumulate as soon as the purchase posts to the account?

 

I have never done a lot of balance transfers, but when I read this line I think that this certainly is a sort of "hidden" cost of a balance transfer...if, in effect, you are now paying full interest on EVERYTHING you subsequently purchase on the card.

 

Am I correct in the way I am interpreting this?

Message 1 of 2
1 REPLY 1
MarineVietVet
Moderator Emeritus

Re: How is interest charged on purchases after balance transfer?


@LynetteM wrote:

Please help me understand how credit card companies handle interest on purchases after you transfer a balance. When trying to get you to transfer a balance to their card, usually in big letters they will tout the 0% interest for however long, etc. Then....following that pitch in small letters.....it says, "...after the first Balance Transfer posts to your Account under this offer, then your purchase APR will apply, currently 11.99%. (or whatever your current interest rate is)."

 

Does that mean that you can no longer have any float time on your purchases....that interest on your purchases starts to accumulate as soon as the purchase posts to the account?

 

I have never done a lot of balance transfers, but when I read this line I think that this certainly is a sort of "hidden" cost of a balance transfer...if, in effect, you are now paying full interest on EVERYTHING you subsequently purchase on the card.

 

Am I correct in the way I am interpreting this?


The BT is kept separate from any future purchases and you are correct that any transaction going forward will be subject to the normal APR. That's why IMO  it's a good idea not to mix the two and not use the card for anything else until the BT is paid off.

 

But that's just me.

 

 

 

From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

Message 2 of 2
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.