Credit Card Interest Question

mzungu74

Okay, so I thought I was okay at this moneysaving, but turns out I got credit cards all wrong- and I'd just like other MSE'rs to confrim my rookie error.

I have a credit card with the Clydesdale Bank. Usually pay it all off but couldn't last month as booked my hols on it. The balance on 5th November was £1320 and I paid £900 of that by the payment due date (3rd December).

When the next bill came in I was charged 38.53 interest (at 1.667 per month).

I thought this was too much as I presumed I would only be charged interest on the outstanding £420. I just called Cydesdale and they said no I would be charged interest on the full £1320.

I was surprised at this! As it means if I paid the minimum or I paid all but £1 of the £1320 I would still have been charged the same interest.

I presume I just don't understand credit cards as well as I thought I did, but would like you wizened MSErs to confirm my error.

Many thanks
M74

CLAPTON

all credit cards charge interest on a daily basis from the time you spend the money to the time you repay.

as a special arrangement if, and only if, you pay in full each and every momnth then the interest is cancelled... (hence the up to 50 days interest free credit)

so in your case you will pay interest from the date you spent the 1320 until you pay it off.....

so no, you don't pay the same if you had only paid £1 instead of 900 but you still pay a lot.


and by the way when you do now pay the full balance then you will still have some 'trailing' interest in the next statement (this will be the interest between the statement date and the time you actually pay.

you need to pay in full for two consecutive months to stop all interest.

oscar52

Thats a charge card and not an actual credit card - they may not charge interest, but they do charge a near £100 fee initially and monthly fees thereafter.