can someone work this out??

Liquid_Stool

hey all,

i recently transfered £1160.07 from capital one card with an APR of 16.9% to a very good deal (i thought) that i had managed to squeeze out of my bank 1.9% for 12 months. (this card had a £0 balanve when i transferred)

I just recieved my monthly from my bank and my minimum monthly payment is MORE than i was paying when it was on my capital one card! How is that? the point of me transferring was so that it would lower my monthlys, not increase them!

according to the statement from my bank the rates are:

mthly int tates: BT's & Cheques 0.1610%; Cash Transactions 1.7366%; Retail & Non Promo BT's & Chqs 1.2408%

my recent transaction are:

description balance

14th June £0000.00
15th June Bal Trsfr £1160.07
15th June Bal Trsfr Fee £ 34.80
19th June Int Charged £ 5.36

Balance £1200.23

Minimum payment due £27.00


cann someone tell me if the figures above work out?

thx people

Liquid

newleaf

Different banks charge differing percentages of the outstanding balance as their minimum payment. It will be specified in the terms & conditions. It sounds like your new card charges a higher percentage as minimum, so although you will ultimately pay less interest you may have to pay off a bigger chunk each month. I think it is a fairly common pitfall for people who are trying to cut down their monthly outgoings.

Liquid_Stool

hey newleaf, thanks for your reply.

So, it could be that Capital One had a minimum monthyly payment of 3% of the total balance, whereas my bank's card has probably 5%?

i can't find anything on my statement though. Could someone work this out from the figures above?

thx

newleaf

I've definitely seen some info on this topic somewhere on the site. Maybe in the 'credit cards' section of the main site. Or you could try a search of the forum for 'minimum payment' and see what comes up?

YorkshireBoy

Your minimum payment is 2.25% (27 / 1200.23 x 100). Is it a Barclaycard?

Is your statement date the 19th?

If so, were you carrying a balance at any time between the 19th May and 14th June?

BTW, it looks like you paid a 3% BT fee for your 'special' rate.

Liquid_Stool

hey Yorkshire Boy

The card is an Abbey National Visa (MBNA). Yes, the statement date is the 19th and finally, yes there was a balance of £481.79 which was paid in full on the 14th June.

Thx


Liquid

YorkshireBoy

Was the previous balance (that you cleared on the 14th June) interest bearing?

If so, you may have cleared the balance but NOT the interest that had accrued but had not yet been applied. My logic being that I can't compute the interest applied from the 2 rates you quote in your OP, on what is essentially a 4 day charging period.

At the end of the day, with the Capital One minimum payments at 3%, 2.25% HAS to be cheaper - unless there are other factors that we're not aware of.

Liquid_Stool

Hi again Yorkshire Boy,

if by interest bearing you mean it had accrued interest because i had not paid it all of in the 56 day imit thing then the answer would be yes.

If i had paid off the entire balance though leaving me with a £0 balance when i made the transfer, why should i be being charged on that previous amount?

Can you clarify for me that i am indeed being charged 1.9% interest on the BT i made?

thx

liquid

Cumbrian_Male

Because if your balance was interest bearing then you pay interest the following month on your balance from your statement date until the date your payment reached our account.

IE statement produced 14th, payment due by 28th, you pay on the 25th so interest due from 15th to 24th inclusive.

Hope that helps.

YorkshireBoy

Liquid_Stool wrote:

If i had paid off the entire balance though leaving me with a £0 balance when i made the transfer, why should i be being charged on that previous amount?

Because you hadn't paid it ALL off - you wouldn't have known what the interest was until your statement was produced. If you have an interest bearing balance, you need to pay off 2 consecutive statements in full before their respective 'due' dates to completely eliminate the interest. See your T&C's for further details.

2d We will charge interest on handling fees, and on interest you already owe, at the rate which applies to the relevant transaction. We will always charge interest on any annual fee, service charges and default charges at the rate which applies to card purchases. We will not charge interest on the card purchases shown on your statement if you pay off the whole balance shown on that statement, and on the statement before, by the date the payment is due. Otherwise, we will charge interest on all transactions, handling fees, service charges, default charges and interest starting on the transaction date and ending on the date you pay the bill in full. We work out interest each day, so the earlier you make a payment, the less interest you will have to pay.

Can you clarify for me that i am indeed being charged 1.9% interest on the BT i made?

No, not from the information provided. I suggest you ring the credit card provider to put your mind at rest.

Liquid_Stool

Will do, thanks for your help Yorkshire Boy