Nationwide Interest

suepeta

Please can you tell if I am missing something.  I paid my CC bill off the day before the payment was due as I always do.  I opened this month's statement and found I have been charged interest.  I've just phoned and they have told me that I will now have to pay interest on anything I buy on my CC even if I pay my bill off in full.  Is this right and if so, is it just Nationwide?  I really only have the card for holiday spending abroad, because they charge a fee on overseas transactions on their debit card.  So I will be cancelling the card but wondered if this is now what every card does?
Many thanks

CliveOfIndia

No, as long as you pay in full on time, you won't be charged interest - this is true of all mainstream cards.

There are, however, 2 situations where you can be charged interest.  One is "trailing interest" - if you didn't pay the previous bill in full, then you'll have interest carried forward to the next statement.  The second one is if you make a cash withdrawal, or buy something that's classed as a "cash-like" transaction (foreign currency is a very common one).  Either of those two situations will see you being charged interest.

If you have got either trailing interest or a cash advance, then you can mitigate the amount of interest by making an interim payment - but do remember you'll still need to pay full amount as printed on the statement when the next bill comes in.

eskbanker

Have you paid off every statement in full by its due date?

Are there any cash-like transactions on these statements?

Which specific card is it?

Their currently-offered card has the industry standard interest-free period:

Interest-free period

• Maximum 56 days for purchases if you pay the total of all non-promotional balances on your statement in full and by the due date
• No interest-free period on balance transfers or cash withdrawals. Interest on balance transfers and cash withdrawals will be charged at the rates shown above.

https://www.nationwide.co.uk/credit-cards/member-credit-card/member-credit-card-rates-and-details/

etienneg

When you say "I paid my CC bill off the day before the payment was due", what exactly do you mean? What matters is not the date that you did whatever you did to pay off the balance, but rather the date when the payment was credited to your account. Weekends and bank holidays can cause delays. Also, various payment methods aren't instantaneous. So, on what date was payment due, and on what date was payment credited? 

suepeta

CliveOfIndia said:

No, as long as you pay in full on time, you won't be charged interest - this is true of all mainstream cards.

There are, however, 2 situations where you can be charged interest.  One is "trailing interest" - if you didn't pay the previous bill in full, then you'll have interest carried forward to the next statement.  The second one is if you make a cash withdrawal, or buy something that's classed as a "cash-like" transaction (foreign currency is a very common one).  Either of those two situations will see you being charged interest.

If you have got either trailing interest or a cash advance, then you can mitigate the amount of interest by making an interim payment - but do remember you'll still need to pay full amount as printed on the statement when the next bill comes in.

This is how it has been in all the years I have had various credit cards.  But now Nationwide are telling me that if I buy something on my credit card, even if I pay it all off immediately, I will be charged interest.  I never withdraw cash or do anything similar

suepeta

etienneg said:

When you say "I paid my CC bill off the day before the payment was due", what exactly do you mean? What matters is not the date that you did whatever you did to pay off the balance, but rather the date when the payment was credited to your account. Weekends and bank holidays can cause delays. Also, various payment methods aren't instantaneous. So, on what date was payment due, and on what date was payment credited? 

My bill was due on 9th April.  I transferred the money on 8th April and the CC bill was paid in full on time - Nationwide don't dispute that.  But they are saying that they now charge interest on anything bought on the card, even if the bill is settled in full

suepeta

eskbanker said:

Have you paid off every statement in full by its due date?

Are there any cash-like transactions on these statements?

Which specific card is it?

Their currently-offered card has the industry standard interest-free period:

Interest-free period

• Maximum 56 days for purchases if you pay the total of all non-promotional balances on your statement in full and by the due date
• No interest-free period on balance transfers or cash withdrawals. Interest on balance transfers and cash withdrawals will be charged at the rates shown above.

https://www.nationwide.co.uk/credit-cards/member-credit-card/member-credit-card-rates-and-details/

Yes I always pay my bill in full, and rarely use the card.  There are no cash like transactions.  I just can't understand the interest charge  - on the phone they said they will now charge interest on everything paid for on the card.  It doesn't seem right to me

etienneg

suepeta said:

etienneg said:

When you say "I paid my CC bill off the day before the payment was due", what exactly do you mean? What matters is not the date that you did whatever you did to pay off the balance, but rather the date when the payment was credited to your account. Weekends and bank holidays can cause delays. Also, various payment methods aren't instantaneous. So, on what date was payment due, and on what date was payment credited? 

My bill was due on 9th April.  I transferred the money on 8th April and the CC bill was paid in full on time - Nationwide don't dispute that.  But they are saying that they now charge interest on anything bought on the card, even if the bill is settled in full

Well, I really don't understand this, then. I have (amongst others) a NW CC that is paid in full each month by DD and they never charge me interest.

I've just checked online. My latest statement was produced on 9th April, with payment due by 4th May. It definitely shows zero interest charged. Of course, it shows an estimated interest figure, which is explained as the likely interest to be charged next month if only the minimum payment were to be made by the due date. That won't actually be charged, however, as the DD will pay off the whole balance.

I think there must be some misunderstanding between you and NW. As others have said, if you don't pay off the whole balance by the due date then interest is charged on all purchases from the date they are made until the next time a statement balance is paid in full by the due date. Are you absolutely sure you paid every penny of the outstanding balance last month? Missing by £0.01, for example, will trigger an interest charge on everything you owe! It's so easy to make a minor mistake such as this when you pay manually.

I agree that what you have said NW have told you doesn't make sense, so I suspect it's a difference between what they meant to say and what you have understood from what they actually said. This can unfortunately happen without either person doing it intentionally, and is one major reason why I hate communicating by phone!

So, for example, let's assume you have somehow unintentionally incurred an interest charge. Above you say "on the phone they said they will now charge interest on everything paid for on the card". Well, in our assumed situation that's true for the moment, and it will continue until you completely clear a statement balance by the due date. But you are obviously thinking they mean it will apply permanently. In normal conversation we don't fully qualify every statement - if we did, our sentences would be very lengthy! We rely on context, and misunderstandings happen all too easily.

km1500

with Nationwide as with other credit cards if you pay off your statement balance in full by the date due you do not pay any interest 

I would call them again and try and get to the bottom of it

suepeta

km1500 said:

with Nationwide as with other credit cards if you pay off your statement balance in full by the date due you do not pay any interest 

I would call them again and try and get to the bottom of it

Thank you - I'm going to ring them today.  I found this on their own website so there's no way I should have paid interest.  

Paying off your balance

If you pay off your statement balance in full and on time, you won’t pay any interest on new purchases.

CliveOfIndia

suepeta said:

Thank you - I'm going to ring them today

Please do come back and update us - I think you've got us all intrigued as to the reason

suepeta said:

  I found this on their own website so there's no way I should have paid interest.  

Paying off your balance

If you pay off your statement balance in full and on time, you won’t pay any interest on new purchases.

Yep, as has been mentioned a few times, this is how it works for all UK credit cards (OK, there may be an odd exception, but certainly all of the mainstream cards work like this).

Usually, the only things that will cause you to pay interest are trailing interest (where you failed to clear in full last month), cash withdrawals from an ATM, or a transaction that's classed as "cash-like" such as buying foreign currency.