Interest on CC

GeCon

Hi there,

I hope someone can help me understand how interest on CC is charged.

Let's have a look at the following example:

GBP 6,563.01 on my CC. It says that the interest rate is 1.385% which makes the total interest on purchases GBP106.61. Now when I calculate the base that this 1.385% has been applied on, I get GBP7,697.47. But I haven't even got that much debt on my card! How is this possible or am I completely missing the point here?

Thanks.

Robert_Sterling

I think that if you clear your account each month you may have had up to about 56 days free credit on each purchase.
In your case I think you are being charged interest from the date of purchase on each item taken separately and at a daily rate which equates to the stated monthly rate.
My explanation may have cleared the matter up for you or muddied the waters still further.

Milarky

You get charged from the date of transaction up until the statement date. In other words take the daily rate of 0.04553% and work backwards.

When did you make the purchases in question?

Using your balance figure of £6500 it would take about 35-36 days for the interest to amount to £106.


Example: Suppose your statement was dated 10th Sept and you made a purchase for £6500 on 4th August? Your August statement would show just the £6500 and give you about 25 days to clear this or then be charged interest - which in this example would be for the entire period from 4th August to 10th September.