Fluctuating Cash/interest rate on credit card?

kolin_2

Hello all,

I've just been going through my credit card statements trying to figure out/calculate why the interest rate on cash advances on my credit card is fluctuating. well not actually, the interest rate itself, just the amount of money that is being shown.

I've been trying to pay off this card for a long time now, I applied for a 0% balance card last year but got rejected, so i figured after being stable financially for a while now, i'll try again. ANYWAY.

Just some pointers, I don't use this card at all anymore. I havent used it for 18 months now, just keep paying above the minimum. It's a HSBC card and its APR is a horrible 24.9%.

Basically this is what it looks like:
Balance - Month - Min payment - Acutal Paid - Cash/@rate - purchase/@rate
===================================================
4896.96 - jun - 122.42 - Not Paid Yet - £103.57/2.073 - £4.44/1.878
4948.95 - may - 123.72 - £160.00 - £88.05/2.073 - £4.92/1.878
5005.98 - apr - 125.15 - £150.00 - £98.22/2.073 - £6.56/1.878
5041.20 - mar - 126.03 - £140.00 - £97.33/2.073 - £6.87/1.878
5065.00 - feb - 126.63 - £128.00 - £91.16/2.073 - £6.98/1.878
5094.86 - jan - 127.37 - £128.00 - £94.41/2.073 - £7.67/1.878

simple, why is the interest on cash fluctuating up and down regardless of balance on the card and payments made?

YorkshireBoy

kolin wrote: »

...why is the interest on cash fluctuating up and down regardless of balance on the card and payments made?

The number of (interest accruing) days in the statement periods is varying each month?


Edited to add...

You're not paying on the same date (or same number of days since statement date) each month?

kolin_2

YorkshireBoy wrote: »

The number of (interest accruing) days in the statement periods is varying each month?

really? how do i know how many interest accruing days are in a statement period?

I mean, May has 31 days, April has 30 days yet, yet it dropped from 98 in april to 88 in may, then up to 103 in june, which has 30 days...

I realise i'm talking proper days here, does the statement say somewhere how many int.accru.days there are in a period?

YorkshireBoy

The statement date will be on the statement.

Did you see my later edit re payment dates?

kolin_2

YorkshireBoy wrote: »

The statement date will be on the statement.

Did you see my later edit re payment dates?

no but i've just seen it now, so basically the closer you pay to the actual statement date means you accrue less interest? no i'm with you i think!

YorkshireBoy

kolin wrote: »

so basically the closer you pay to the actual statement date means you accrue less interest?

Yes, because interest accrues daily based on each day's closing balance.

kolin_2

okay forgive me if i'm being a bit thick here. i've re-gone through my statements, because i think its still fluctuating and can't figure why.....

Balance        Month    Min Pay        Pay Date    Paid    Days from statement    Paid date    Cash interest    Cash rate    Purchase interest    Purchase rate    estimated nxt mth
£5,094.86    Jan-10    £127.37        22-Feb-10    £128.00                                    £94.41            2.073        £7.67                1.878    
£5,065.00    Feb-10    £126.63        22-Mar-10    £128.00                        05-Mar-10    £91.16            2.073        £6.98                1.878    
£5,041.20    Mar-10    £126.03        22-Apr-10    £140.00    21                    19-Apr-10    £97.33            2.073        £6.87                1.878            £105.25
£5,005.98    Apr-10    £125.15        24-May-10    £150.00    9                    07-May-10    £98.22            2.073        £6.56                1.878            £104.78
£4,948.95    May-10    £123.72        21-Jun-10    £160.00    8                    03-Jun-10    £88.05            2.073        £4.92                1.878            £110.04
£4,896.96    Jun-10    £122.42        23-Jul-10    £150.00    8                    06-Jul-10    £103.57            2.073        £4.44                1.878            £96.02
£4,841.18    Jul-10    £121.03        23-Aug-10    £160.00    3                    30-Jul-10    £91.14            2.073        £3.08                1.878            £95.00
£4,773.74    Aug-10    £119.34        20-Sep-10                                            £90.77            2.073        £1.79                1.878            £103.31

these are all i have to hand thanks to Internet banking. but i'm not sure about interest accruing daily, for example my march statement took me 21 days to pay, the (cash)interest went up £6 however may and junes statement was exactly the same timescale between statement date and payment day (8 days) and yet the cash interest accelerated to £103 from £88?? and now my estimated interest for next month (sept) is expected to be £103 even though i'm paying tomorrow (3 days from statement date)

it just seems all over the place for no valid reason.

is it right though??

CLAPTON

the interest accrues on a daily basis


so the interest will be made up of two elements

1. the interest on the 'unpaid balance' will depend upon the number of days between statement dates
2. the interest on the amount paid off will depend upon the number of days betweeen the statament date and the actual payment date

so lets take any example

suppose you owe 5,000 on your statement daye of 4/february 2010
you pay off 500 on the 14th Feb
leaving 4,500

your next statement date is say 3 march (statement dates aren't always on the same day of the month)

so you pay daily interest on the 4,500 between 4th feb and 3th march i.e. 27 days
you pay interest on 500 between 4th feb and 14th feb i.e. 10days


so the information you have supplied is inadequate to work out the details
also it depends upon whether they charge interest on the interest

Typhoon2000

Your minimum payment is what you have to pay to avoid a late fee, it is not nessarily designed to reduce your ballance, especialy if your interest rate is high (like your Cash advance rate).
Looks like your payment are just enough to bring down your purchase balance every month but not your Cash advance. You will need to start paying more a month to rectify it.