Interest on a Zero Balance

BeerNuts · 18 May 2006 at 4:27PM

I have a Virgin Money credit card which has come to the end of the 0% transfer period.

April Statement was £5,505.69

I cashed in an ISA to pay the whole amount off and looked forward to the pleasure of seeing a zero balance on my May Statement.

To my horror there was a charge of £46.54 for interest.

On phoning customer services, I was informed that interest is charged on the previous months balance, and I should have taken into account the estimated next-statement interest, which was £66.23.

If this Interest is charged on a previous month surley this can be calculated exactly and why has it come down from £66.23 to £46.54?

My May Statement shows

04 May - zero balance

11 May - interest £46.54

When I have cleared my other credit cards I have never been charged interest.

Can anyone advise if this is worth pursuing or not?

grumbler · 18 May 2006 at 4:40PM

I am quite sure that you paid the balance on the payment date. However, your 0% period was N months from the account opening and expired well before the payment date. You made the common mistake making an assumption that the end of the 0% period and payment date are the same. In fact they are not for many cards.

BeerNuts · 18 May 2006 at 4:50PM

My 0% period actually ended in Feb so I have already paid interest on the Feb, Mar & Apr statements.

mintymoneysaver · 18 May 2006 at 5:12PM

This happened to us the other month, but thankfully with a much smaller amount.It is to do with the interest from the month before you cleared it apparently, as the interest from your last statement date to the time you cleared it will not have been paid when you clear it but will be added onto the next statement.Once you pay this it will be totally clear.

BeerNuts · 18 May 2006 at 5:27PM

This Stinks!
I have not had this on either my Barclaycard or Lloyds credit card, when I pay the whole balance the following statement shows zero.
Thank goodness I have cleared off the Virgin (MBNA) card, I shall take great delight in cutting up the card and will never use them again.

grumbler · 19 May 2006 at 9:40AM

BeerNuts wrote:

My 0% period actually ended in Feb so I have already paid interest on the Feb, Mar & Apr statements....

I have not had this on either my Barclaycard or Lloyds credit card, when I pay the whole balance the following statement shows zero.

. With majority of CCs (including Barclaycard and Lloyds) you have up to about 8 weeks interest-free period on purchases. However, this is only on purchases and only if you pay the current balance and previous balance in full. As you paid interest, you didn't pay balance in full and hence did not have any interest-free period. £46.54 is the interest on your balance for the period between the statement and the day when you paid it in full. I don't think that 'this stinks'....

Milarky · 19 May 2006 at 11:36AM

So the OP's misconception seems to be that there would always be 'grace' period between each statment and the associated 'due date'. That of course as grumbler says incorrect. Interest-free periods only run in set set circumstances. Either:

where you start a statement period with a nil balance or

where you start the period with purchases made in the previous period only

Interest on a Zero Balance

Comments

Confirm your email address to Create Threads and Reply

🚀 Getting Started

Categories

Is this how you want to be seen?

Get our FREE Weekly email full of deals & guides - and it’s spam-free