Have I got The Brains Of a Rockin-Horse? Paid C/C In Full-NO Interest Free Period

kennyjosiah

Hi, am I being a bit thick (no funny comments pleaz) or has anyone else had this problem and thought this is wrong ?

Ordinarily I have always been one to spend on my credit card and part pay the balance each month - this year I decided I would pay my balance in full each month and use it for daily expenses (shopping/petrol, etc) so I could benefit from the 56 days interest free period (+ points on my spending) for purchases and pay the full balance using my bank account.

in April I almost cleared quite a large outstanding balance to get me started bar a small amount of £50 - this was then carried forward to my May statement - which together with the spending on purchases for April came to about £700 of which included £23 interest for that months spending - total £723.00 on my May statement.

I paid the whole of the £723 off in full well within the due date and according to the INTEREST CHARGING INFORMATION on the Back of my statement and I quote "IF YOU PAY THE BALANCE IN FULL, ANY INTEREST CHARGED FOR THE PERIOD FROM THE PREVIOUS STATEMENT TO THE DATE OF THE FULL REPAYMENT WILL BE DEBITED THE FOLLOWING MONTH"

Now, am I being thick but doesnt this mean I should have had the £23 interest debited (refunded) back onto my account on my June statement ??

When I rang the call centre to ask about this I was kept on hold for an age while the operator looked into it and then spouted claptrap about residual interest ??????

As I read the terms on the back of the statement, if I pay the balance in full as I had, the interest charged for that period should be refunded ??

Also, I have also found out that the 56 days interest only applies if you pay the monthly statement balance in FULL by the due date -

I have found this out as in a previous month I paid in full bar a small amount of about £10 which was paid a day or two past the due date - and so the WHOLE OF THE MONTHS INTEREST applied even though it was only a small part of the balance that was omitted from the payment and paid late (to me the interest charged should only have applied to the £10 I paid in late ?) - I appreciate that this is down to my own fault - but it still doesnt seem right that they say there is an interest free period when in fact there isnt ! and surely with a month being 30 days approx - there would never be a 56 day interest free period ? again I know I am probably being a bit thick here, (I dont have a very analytical mind - hope I spelt that right)

Please be gentle with me - have I got the brains of a rocking horse ? and the credit card company is right ? it just dont feel right to me

Call_Centre_Monkey

kennyjosiah wrote:

I paid the whole of the £723 off in full well within the due date and according to the INTEREST CHARGING INFORMATION on the Back of my statement and I quote "IF YOU PAY THE BALANCE IN FULL, ANY INTEREST CHARGED FOR THE PERIOD FROM THE PREVIOUS STATEMENT TO THE DATE OF THE FULL REPAYMENT WILL BE DEBITED THE FOLLOWING MONTH"

Now, am I being thick but doesnt this mean I should have had the £23 interest debited (refunded) back onto my account on my June statement ??

When it says debited on the statement, it means it will be charged to your account. Credited would be a refund.

The only time you'd get a 56 day interest free period on a transaction is if the amount is debited to the account the day after your statement is printed up.
Generally some items you'll get 50 odd days interest free on, others you may only get 25 days on, depending when you use the card.

I'll take a guess and say the problem may be it's a Low Apr (no interest free period) card you have - although unlikely since you stipulated an interest free period of up to 56 days on your purchases. Perhaps the problem is due to a balance transfer, cash or any promo cheque transaction on your account?

p1an0player

No you're not being thick, credit card companies just like to be confusing.

Here's what I think happened:

Let's assume that:

Your statement dates are 15th of each month
You receive each statement 3 days later on the 18th, and
You have to make a payment on the 5th of the following month.

You received a statement on 18th April (relating to spending 15/03 to 15/04) and you paid all but £50 off by 5 May.

Unfortunately by not paying off the whole balance though, you lost your entitlement to the free interest period, and you had to pay interest on all your spending in the period 15/03 to 15/04.

So you were charged £23 interest on all your spending in the period 15/03 to 15/04.

That £23 interest was charged to your account probably on 5th May, and appeared on your next statement dated 15th May (which showed your spending 15/04 to 15/05).

By paying off your full £723 eg on 5th June, you avoided having interest charged for your spending 15/04 to 15/05, and no interest will show on your statement due 15 June.

This is entirely normal for most credit card companies.

Hope this helps

Call_Centre_Monkey

p1an0player wrote:

No you're not being thick, credit card companies just like to be confusing.

Here's what I think happened:

Let's assume that:

Your statement dates are 15th of each month
You receive each statement 3 days later on the 18th, and
You have to make a payment on the 5th of the following month.

You received a statement on 18th April (relating to spending 15/03 to 15/04) and you paid all but £50 off by 5 May.

Unfortunately by not paying off the whole balance though, you lost your entitlement to the free interest period, and you had to pay interest on all your spending in the period 15/03 to 15/04.

So you were charged £23 interest on all your spending in the period 15/03 to 15/04.

That £23 interest was charged to your account probably on 5th May, and appeared on your next statement dated 15th May (which showed your spending 15/04 to 15/05).

By paying off your full £723 eg on 5th June, you avoided having interest charged for your spending 15/04 to 15/05, and no interest will show on your statement due 15 June.

This is entirely normal for most credit card companies.

Hope this helps

Yep, that sounds about right. As I say, the only exception would be if part of the balance was made up for a Balance Transfer, a Cash transaction or a Promo Cheque transaction.

sarymclary

I had something as equally frustrating earlier this year. I was fortunate enough to be able to clear a large credit card bill in full (c.£6k). I booked an appointment at my local branch to discuss my finances, and they recommended I swapped my Mastercard (after clearing the balance in full) to a new Amex one they'd introduced, which would earn me points on my spending, if I used it and cleared my balance each month. Much as Kennyjosiah is hoping to do. So, I cleared the amount given on my current statement in full using my online banking, and went back the following day to complete the new Amex application in branch. There were still a few pence outstanding, which seemed ridiculous, as I'd cleared the balance as it stated on my current online statement, which I'd printed off to show the member of branch staff. She was unable to explain why the balance hadn't cleared, and had to ring the credit card offices. They explained that despite trying to clear the balance in full, my interest was being charged at a daily rate, and would keep changing. Therefore, I had to guess how much to pay, and ended up with a small credit balance on the card instead. This made no sense to me at all, but I just presumed it occurred because up until this point I'd only made minimum payments each month, so I wasn't qualifying for an interest free period.

nomoneytoday

The only way for 50 days interest free is to pay off the complete balance for 2 consequtive months. If you fail to pay the entire balance interest is charged for the entire period.
You are not entitled to the £23 back. It is the cost of the loan for this time.