What is accrued interest?

Katykat

I have a N'wide credit card, which I usually pay off in full whenever I use it. However, I used it in April on holiday, & on my May statement, the balance was £1935. I was waiting for a sum of money to be paid to me, so I didn't pay the full amount. The minimum payment was £58, but i paid £100. Some of the transactions from holiday did not come through until my next statment in June, so my balance then was £2040, which I paid in full, 15 days before the minimum payment date, so my balance was Nil. I have just had my July statement & they have charged me £8.44 interest. When i queried it I was told it was accrued interest because I paid less than 10% of the balance, in May, even though I paid more than the minimum payment. I've looked for this explanation in the T&C's, but cant find it. Is this correct?

YorkshireBoy

You were given duff information on the 10% figure. It didn't matter whether you paid the 3% minimum, 10%, or 99%...the outcome would have been the same, ie interest would have been charged because you didn't pay 100%.

Their use of the word "accrue", whilst technically correct, isn't the recognised way of explaining where/how the interest has arisen.

What you're seeing is residual, or trailing, interest (which has accrued) because you didn't clear the statement in full (and/or the last one) by it's payment due date. You'll continue to see this on your statements until you have paid off the full statement balance for two consecutive months by their respective payment due dates.

Katykat

Thanks Y/Boy, I think that ties in with what I was told, although the customer service agent called it accrued interest. I was actually charged interest in my June statement (£32) & my July statement says, "paid in full, balance Nil, merchandise Interest £8.44.It was because I had not used the card that I queried this, but it seems to be correct. She did say that there would be another charge on August statement, although a much smaller amount. NOW I know why I usually pay it off in full.