Can someone please explain how interest free balance transfers work when you have a balance on the card already?

[Allornothing9]

These aren’t exact figures but for example sake.. I have £800 on a Lloyds card, 6% interest.

I have £2k on another high interest card but have been offered a 0% balance transfer onto my Lloyds card, which I want to take up.

Presumably I will be paying 6% interest on the £800 and not the £2k, but if I were to pay off £500 next month, will that come off the 2k iyswim? So there would be no change to the amount of interest.. or would it reduce the interest? I am really struggling to wrap my head around it.

Your payments will always go against the balance incurring the highest amount of interest, so in your example, any payments you make will go towards your £800 balance until it is cleared.

@feliciabirthgiver oh my goodness thank you! Hours of googling and I should’ve come straight here!

No probs, you will see the two balances as 2 separate lines on the summary on your statement. The £800 at 6% and the balance transfer at 0%.

Yep @feliciabirthgiver is correct, and here’s the page from Lloyds. Scroll down to “how we apply your payments”

https://www.lloydsbank.com/credit-cards/ways-to-pay-your-credit-card.html