If you want to make sure you're paying off your transferred balance within the balance transfer period, you need to understand how your payments work.
Your credit card will attract fees and charges, any payments you make will go towards these first. After that, payments will go towards the balance transferred, then to cash advances and purchases. Please note, that cash advances and purchases will attract standard interest rates, not the balance transfer rate.
If you don't make purchases or cash advances on your credit card while you have an active balance transfer on your account, the lower balance transfer interest rate will apply meaning you can keep interest charges to a minimum.
If you’ve made more than one balance transfer, payments will first go towards the balance transfer with the lowest interest rate. If you have multiple balance transfers with the same interest rate, payments will be applied to the oldest balance transfer first.
For example, John has three active balance transfers on his Zero Visa:
- $800 remaining on a 1.99% p.a. balance transfer plan that was processed on 1 June 2019
- $6500 remaining on a 0.00% p.a. balance transfer plan that was processed on 22 August 2019
- $3400 remaining on a 0.00% p.a. balance transfer plan that was processed on 28 October 2019
John receives his monthly statement and makes a payment of $600 a couple of days later. This payment will first be applied to any interest and fees charged and then to the balance transfer of $6,500 processed on the 22 August 2019. Even though the balance transfer with $800 remaining was processed first, payments are applied to balance transfers with the lowest rate first.
Read more about the order of payments