So I have a Tesco credit card with £2,000 transferred balance on it – 0% for another 32 months. Recently I made a purchase on it of £500 then paid it off a few days later – it was the card I had to hand at the time and I always intended to pay it off almost immediately i.e. use it this once like a debit card. Purchases on the card are charged at 1.5% at the moment so I wanted to pay it off straight away to avoid the interest.
Now I thought that credit card companies legally had to take payment off the highest interest-incurring balance on the card at any given time and therefore the £500 I paid would clear the £500 purchase as that would incur interest as of next statement whereas my transferred balance wouldnt. But it hasn’t – £500 has come off the £2,000 balance. So I now have the ludicrous situation where I have an interest-accruing purchase and £500 less on a balance incurring no interest for the next 32 months?!?!?
I even phoned Tesco a while back when I was thinking about doing something similar before and the guy on the phone assured me that this is indeed how credit cards work i.e. the money comes off the highest interest balance and also (crucial here) that the system is smart enough to know what the highest interest incurring balance is going to be even if the latest statement hasn’t been drawn up.
I’ve called Tesco now and they’ve said that no, the system isn’t that smart and I should’ve waited for the next statement to be drawn up before making this payment – is that right? Seems crazy to me, also not what Tesco told me before. Punished for paying off the balance within days rather than waiting for the next statement?
So can anyone please comment on if a) this is right and b) if I complain to Tesco and ask them to listen back to the last call where I was told this is the case, would they change the payment to come off the purchase rather than the transferred balance? I’m hardly a master criminal seeking advantage here, just someone trying to pay off a purchased item in line with what I was directly told by Tesco in the past?