M&S Interest help!!!!!

Lally17

Hoping someone here can help me make sense of this....have battled now 6 times with M&S who can't explain it to me, nor my Mum who used to be book-keeper!

Had balance of £72.78 on statement. Paid off £35 mid month WAY before Payment due date.
When statement arrived, shows 72.78 and £35 payment, BUT! interest showing as £21.85.,.this works out to be 30.4% interest on the amount of 72.28, not the 37 outstanding.....not the 18.9% stated on statement.

Have spent nearly hour and half on phone to various departments, NOONE at M&S can understand it, just keep saying they will send me out paper explaining it! They are telling me i HAVE to pay the full amount outstanding (£59ish) even though they can't tell me where interest comes from. From my reckoning i should pay £13 interest on the £72.....

HELP!!!! feel like i'm fighting a losing battle against them but am loathe on principal to pay,but know this will be really bad for my credit rating! Either way will cut my card up, but want/need to understand it!!

Thank you in advance.....

somethingcorporate

What did it say was the payable interest on the statement that you had?

The value you quote would relate to 30% a month, I am sure that the 18.9% you are referring to is the annual rate.

Something is amiss here... pay it so you don't default but keep at M&S until you are satisfied.

Lally17

The estimated interest on the PREVIOUS statement (with £72.78) was 22.04. Have to admit i didn't notice this...the interest on the PRESENT statement (with £59 on) is 81p!!!!!!

I THINK whats confused them is that i booked some flights on the previous statement, but paid them off in FULL before the statement came.....over £1000 worth. But they don't seem able to listen/understand this!
Thank you for your help.

mrs_deadline

When you paid off the flights in full, maybe there was a previous item on the statement already, and part of the payment was applied to that first?
There is information about the order of payments given on the statement.

Lally17

PREVIOUS statement had 18.85 on,
Then flights went on (£1732)
paid off the 18.85 mid month again
then £72 spent
then flights were paid off......
leaving 72.78 on statement......

Bossyboots

Unless you pay off your statement in full every month, you are not entitled to any interest free period on your purchases and therefore as soon as the flights hit your account interest started accruing. In addition, the payments you made will have been applied to your oldest purchases first so anything outstanding on your statement will have been paid off, leaving a balance from the flights still on the statement. You can't choose which items are paid off first, even if you pay a sum equal to an item on the statement.

Once you have cleared the statement IN TOTAL on or before the repayment date, you will then have "residual" or "trailing" interest following on which is the overflow from the statement date to payment.

Therefore, the high interest appears to have occurred because you had no interest free period on your purchases and thus there was still interest to be paid on the flights even though you paid a large sum onto the account before the statement date.

dtaylor84

18.9% APR is equivalent to 1.45306% monthly.

1.45306% of 1732 is approximately £25.17. Assuming the flights were there for most of the month, this sounds more or less correct.

You will be charged interest on ALL charges from the date they were applied unless you paid off the FULL balance (and had paid off the full balance on the previous statement, too). As you left £72.78 unpaid, interest was charged based on your account balance each day.

eschaton

dtaylor84 wrote: »

18.9% APR is equivalent to 1.45306% monthly.

1.45306% of 1732 is approximately £25.17. Assuming the flights were there for most of the month, this sounds more or less correct.

You will be charged interest on ALL charges from the date they were applied unless you paid off the FULL balance (and had paid off the full balance on the previous statement, too). As you left £72.78 unpaid, interest was charged based on your account balance each day.

If M&S have had to explain this to you and your mum 6 times now, they must be getting !!!!ed off. Nothing worse than someone not understanding the t&c's they signed up to.