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Is it 'one month' or 'two months'?
Milarky
Posts: 6,356 Forumite
in Credit cards
NatWest says (of the interest free period)
"Maximum 56 days for purchases if you pay your balance in full and on time, and have paid the previous month's balance in full and on time"
This does not mean, as some have interpreted, that you have to pay the statement balance in full FOR two months BEFORE you use the card again AFTER you have had a statement which you did not pay in full. You only have to have paid the 'previous' statement in full (if there was one) and can start spending on the card immediately after being charged interest...
Look at this made up example
Jan 20 balance £100 Pay by Feb 14
Feb 14 only pay £50
Feb 20 balance £50 + £2 interest (£52) Pay by Mar 14
Mar 1 Make £10 purchases
Mar 14 Pay £52
Mar 20 balance £10 + £1 interest = £11 Pay by Apr 14
[Note £1 is interest on £52 up to payment - not £10 on spend]
Apr 5 Make £25 purchases
Apr 14 Pay £11
Apr 20 balance £25 (no interest on £10 spend) Pay by May 14
Thus no interest is added to the £10 of purchases BECAUSE the previous statement to this (20 Feb) did get paid 'in full' AND the statement on which these purchases appear (20 Mar) then gets paid 'in full'
In other words, in order to benefit from the interest free period again, you only need to have paid the PREVIOUS statement in full irrespective of whether there was interest on that statement - because you always have to pay the CURRENT statement balance in full if you want to avoid being charged. Because you start a new statement period even before the payment date for the previous statement you can start spending on the card again (and have those purchases treated as interest free) even before you pay the first statement in full....
..so nothing has really changed with this wording... it's the ways it's always been with credit cards...
Any comments?
"Maximum 56 days for purchases if you pay your balance in full and on time, and have paid the previous month's balance in full and on time"
This does not mean, as some have interpreted, that you have to pay the statement balance in full FOR two months BEFORE you use the card again AFTER you have had a statement which you did not pay in full. You only have to have paid the 'previous' statement in full (if there was one) and can start spending on the card immediately after being charged interest...
Look at this made up example
Jan 20 balance £100 Pay by Feb 14
Feb 14 only pay £50
Feb 20 balance £50 + £2 interest (£52) Pay by Mar 14
Mar 1 Make £10 purchases
Mar 14 Pay £52
Mar 20 balance £10 + £1 interest = £11 Pay by Apr 14
[Note £1 is interest on £52 up to payment - not £10 on spend]
Apr 5 Make £25 purchases
Apr 14 Pay £11
Apr 20 balance £25 (no interest on £10 spend) Pay by May 14
Thus no interest is added to the £10 of purchases BECAUSE the previous statement to this (20 Feb) did get paid 'in full' AND the statement on which these purchases appear (20 Mar) then gets paid 'in full'
In other words, in order to benefit from the interest free period again, you only need to have paid the PREVIOUS statement in full irrespective of whether there was interest on that statement - because you always have to pay the CURRENT statement balance in full if you want to avoid being charged. Because you start a new statement period even before the payment date for the previous statement you can start spending on the card again (and have those purchases treated as interest free) even before you pay the first statement in full....
..so nothing has really changed with this wording... it's the ways it's always been with credit cards...
Any comments?
.....under construction.... COVID is a [discontinued] scam
0
Comments
-
As far as I'm aware if you pay the full balance as shown on your statement by the payment date then you don't even need to stop spending on it. I was certainly using my card for everything for 3 or 4 months without ever paying interest.0
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