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  • FIRST POST
    • paulfoel
    • By paulfoel 14th Jun 17, 8:05 AM
    • 5,306Posts
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    paulfoel
    Credit card payments and interest - how does it work?
    • #1
    • 14th Jun 17, 8:05 AM
    Credit card payments and interest - how does it work? 14th Jun 17 at 8:05 AM
    Made a bit of a mistake.....

    Example.

    Jan spent £1000 on card.

    Bill 1st Feb for £1000.

    Paid £900 in Feb. Bill 1st march had interest because I didnt pay full balance. My mistake....

    Feb also spent £1000 on card.

    In march, cleared balance from 1st march bill (£100 not paid, plus £1000 plus interest).

    Am I right in saying I will continue to pay interest on original £1000 (that I did not clear the balance) until I pay this in march?

    What about spend in feb and march? Does this attract interest? Or not since this is now paid in full?
    Cymru am Byth !!!
Page 1
    • zx81
    • By zx81 14th Jun 17, 8:23 AM
    • 13,229 Posts
    • 13,539 Thanks
    zx81
    • #2
    • 14th Jun 17, 8:23 AM
    • #2
    • 14th Jun 17, 8:23 AM
    You'll​ pay interest on a daily basis on the balance at the time.

    Once you have cleared two consecutive statements in full, you won't be charged interest as long as you clear in full each month.
    • paulfoel
    • By paulfoel 14th Jun 17, 8:28 AM
    • 5,306 Posts
    • 2,514 Thanks
    paulfoel
    • #3
    • 14th Jun 17, 8:28 AM
    • #3
    • 14th Jun 17, 8:28 AM
    You'll​ pay interest on a daily basis on the balance at the time.

    Once you have cleared two consecutive statements in full, you won't be charged interest as long as you clear in full each month.
    Originally posted by zx81
    !!!!!!.. Few quid then.
    Cymru am Byth !!!
    • Candyapple
    • By Candyapple 14th Jun 17, 10:47 AM
    • 2,283 Posts
    • 1,737 Thanks
    Candyapple
    • #4
    • 14th Jun 17, 10:47 AM
    • #4
    • 14th Jun 17, 10:47 AM
    Given you are spending that kind of money every month, I hope you have been using a cashback card or one that offers you rewards in some form:
    http://www.moneysavingexpert.com/credit-cards/best-credit-card-rewards

    Or if you are finding that you can't clear the balance every month, a 0% purchases card may suit your needs better as you would have no interest to pay for the length of term:
    http://www.moneysavingexpert.com/credit-cards/best-0-credit-cards
    I'm a Board Guide on the Credit Cards, Loans, Credit Files & Ratings boards. I'm a volunteer to help the boards run smoothly, and I can move and merge threads there. Any views are mine and not the official line of moneysavingexpert.com
    • paulfoel
    • By paulfoel 14th Jun 17, 4:06 PM
    • 5,306 Posts
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    paulfoel
    • #5
    • 14th Jun 17, 4:06 PM
    • #5
    • 14th Jun 17, 4:06 PM
    Always pay off in full. This time I paid in two parts and for some reason worked it out wrong.

    (Numbers are made up BTW - acttal total was £2200 and I paid £2000).
    Cymru am Byth !!!
    • skea56
    • By skea56 14th Jun 17, 8:30 PM
    • 400 Posts
    • 225 Thanks
    skea56
    • #6
    • 14th Jun 17, 8:30 PM
    • #6
    • 14th Jun 17, 8:30 PM
    With regards to the above lime about clearing for two statements...is this the full statement balance or the purchase amount?

    I have a Tesco cc on which I have a balance at 0% and I have a dd for the minimum each month. I knock off a bit extra when I can.

    Annoyingly an insurance premium for £150 came off the card the month after the 0% was set up.(I thought it was coming off A diff card)
    the direct debit came off as normal plus I also sent an additional payment of £200 to clear the new purchase but which arrived a day after the payment date so I got charged interest. No biggie it was only £1.70ish but I have since been further charged on the next 2 statements.

    Am I going to continue to receive interest charges until the full balance is cleared?
    Savings: £2 Jar: £804/£1000
    Debts: Santander 1211.12/1780.47 (32% Paid) Total Debt Paid Off £12871.66
    • zx81
    • By zx81 14th Jun 17, 9:52 PM
    • 13,229 Posts
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    zx81
    • #7
    • 14th Jun 17, 9:52 PM
    • #7
    • 14th Jun 17, 9:52 PM
    Until the interest bearing purchases are cleared.
    • Geoff1963
    • By Geoff1963 14th Jun 17, 11:06 PM
    • 1,058 Posts
    • 668 Thanks
    Geoff1963
    • #8
    • 14th Jun 17, 11:06 PM
    • #8
    • 14th Jun 17, 11:06 PM
    I think in some cases it can be cheaper to take a cash withdrawal just before the payment date, if that means being able to pay in full, and hence not have interest on the rest of it. If you have only £100 spare, and need to pay £300, you can take the £100 out and pay it back in 3 times.
    Sometimes the arithmetic makes it sensible to do that.
    • Ben8282
    • By Ben8282 15th Jun 17, 4:33 AM
    • 2,010 Posts
    • 885 Thanks
    Ben8282
    • #9
    • 15th Jun 17, 4:33 AM
    • #9
    • 15th Jun 17, 4:33 AM
    I think in some cases it can be cheaper to take a cash withdrawal just before the payment date, if that means being able to pay in full, and hence not have interest on the rest of it. If you have only £100 spare, and need to pay £300, you can take the £100 out and pay it back in 3 times.
    Sometimes the arithmetic makes it sensible to do that.
    Originally posted by Geoff1963
    Not the generally given advice but yes a very good idea. If the OP had done this he would have paid only the £3 cash advance fee and a very small amount of interest each month.
    • Nebulous2
    • By Nebulous2 15th Jun 17, 5:51 AM
    • 1,572 Posts
    • 958 Thanks
    Nebulous2
    With regards to the above lime about clearing for two statements...is this the full statement balance or the purchase amount?

    I have a Tesco cc on which I have a balance at 0% and I have a dd for the minimum each month. I knock off a bit extra when I can.

    Annoyingly an insurance premium for £150 came off the card the month after the 0% was set up.(I thought it was coming off A diff card)
    the direct debit came off as normal plus I also sent an additional payment of £200 to clear the new purchase but which arrived a day after the payment date so I got charged interest. No biggie it was only £1.70ish but I have since been further charged on the next 2 statements.

    Am I going to continue to receive interest charges until the full balance is cleared?
    Originally posted by skea56
    What payment date did you send the £200 one day after?

    The date after your insurer took the £150 or the due date for the credit card payment?

    You may actually have paid it too early if the insurance payment had not yet appeared on a statement, meaning the £200 came off the promotional 0% balance.
    • skea56
    • By skea56 16th Jun 17, 7:27 AM
    • 400 Posts
    • 225 Thanks
    skea56
    Insurance came out on 26th March,payment was due by 2nd-DD of £36 came out on 2nd. £200 payment came out on 3rd.

    To me,the purchase has been paid off in full And then some?

    Sk56
    Savings: £2 Jar: £804/£1000
    Debts: Santander 1211.12/1780.47 (32% Paid) Total Debt Paid Off £12871.66
    • Nebulous2
    • By Nebulous2 16th Jun 17, 7:25 PM
    • 1,572 Posts
    • 958 Thanks
    Nebulous2
    Insurance came out on 26th March,payment was due by 2nd-DD of £36 came out on 2nd. £200 payment came out on 3rd.

    To me,the purchase has been paid off in full And then some?

    Sk56
    Originally posted by skea56
    Check the allocation of payments from your credit card conditions, but I don't think so.

    It is likely that the payment on the 3rd went to pay off the 0% balance, as the £200 insurance payment would not yet have hit your statement. Generally statemented items are paid first.
    • molerat
    • By molerat 16th Jun 17, 7:40 PM
    • 17,016 Posts
    • 11,194 Thanks
    molerat
    Tesco will pay off statemented items first so as it had not appeared on a statement .........

    This is why you need to understand the T&Cs of your particular card as they are all different, MBNA for instance would have paid off the un-statemented purchase first as long as it was a cleared item.
    www.helpforheroes.org.uk/donations.html
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