Deferred interest

[Anonymous]

I tried to search for an answer here but had no luck. 

I have been working on building my credit for the past 11 months.

I have done allot of reading and have raised my scores each over 125 points in that time

but there are still things I don't fully understand. 

I am trying to figure out, if I purchase an item with deferred interest and already have regular purchases on my credit card, what happens when I make payments?

I always pay my balances in full before the close dates to avoid interest charges.

How do I pay off the regular purchases but leave the deferred interest purchase on card? 

Sorry if this doesn't make any sense. 

Thank you in advance for your help.

[Anonymous]

You should really ask that question to your bank. They typically apply payments to newest charges first so they can catch you with interest. Though they may track this transaction differently as its more in their favor for you to not pay it off early.

Deferred interest can be very tricky. Most of us here will advise that folx avoid such situations. In any event talk to the creditor and try to get the answer in writing.

[expatCanuck]

Google the following:

calculate trailing interest khan academy

It should provide two links to a couple of short videos on the topic which I found helpful.

[Anonymous]

Thank you. I will give then a call before making any deferred interest purchase.

[Anonymous]

Thank you. Looks like there are a few good videos for me to watch.

[MrDisco99]

I have a deferred interest balance on my Barclaycard Apple Rewards card, which is the reason I got it.

I don't put any other purchases on the card, but if I did, my statement every month tells me the minimum I should pay to avoid paying interest that month, which includes the additional purchase balance plus a minimum payment toward the promotional balance.

The golden rule with this type of financing is to never be late.  If you miss a payment or take longer than the deferred interest period to pay off the whole balance, all that interest you've been avoiding will get piled onto your balance.

[Anonymous]

Thank you. I think I might do the same and use that particular card only for larger deferred interest purchases.

[Anonymous]

Kpgile have you read the Terms and Conditions related to your banking relationship? Your question is very valid and should be set forth in your TOC. As other posters mentioned they may have it set up where you have payments credited to new purchases first but you would need to confirm. Seems to me there was something in law on this but my recall is to fuzzy to be accurate.

[Anonymous]

Thank you. I am going to look further into it before making the deferred interest purchase.

[Anonymous]

As previous commentors have stated, it really does depend on the issuer. My Barclaycard w/ Apple rewards doesn't give me the option to allocate payments to deferred interest promos, but my Amazon store card does. 

My rule of thumb is that if you are thinking about putting additional purchases on an account with existing promo balances, I'd pay off the additional charges in full PLUS what you would need to pay in order to pay off the promo balance. So it'd be like whatever I charge that month + an installment of a 12 month interest free payment plan. That way, the first half of the payment automatically goes to new charges and the rest overflows into the promo purchase, but issuers can vary. 

Hope that makes sense and I helped!