Residual (sp) interest

carlachloe

What on earth. Have been paying my credit card balance in full for 4 years on time and last month payment was 2 days late due to me not being well. Anyway got almost £50 worth of interest and late payment charges pretty steep for only 2 days but I suppose thats how they make their money. Only to get this statement through with another £20 worth of residual interest, when I called up to ask what this was they said that because my payment had been two days late they had charged me interest on the whole month of purchases following. All this just because the payment was two days late?? Seems a bit much to me. Now dont get me wrong if you are late in paying fair enough you get charged interest thats how they make their money but how can they make you pay interest on everything for the following month even though you are paid off in full can someone please explain?

Voyager2002

I'm sure that if you are really interested, the CC company would explain. However, the really interesting question is whether they will waive at least some of these charges. Try calling them and asking: since you have been a profitable customer for a long time you have a reasonable chance.

grumbler

carlachloe wrote:

...how can they make you pay interest on everything for the following month even though you are paid off in full can someone please explain?

If you post what card you have, probably somebody will be able to direct you to the exact paragraph of your credit agreement. However, they are about the same for 99% of credit cards: you get up to about 8 weeks interest-free period on purchases only if:

• you pay current balance in full and on time and
• you have paid previous balance in full and on time.

You are not alone in misunderstanding (or not knowing about) these conditions. If you don't pay some balance in full and on time, you lose interest-free period on purchases next billing month.

See, for example:
376% apr &more credit card
Is this right?
Being penalized for paying off balance in full
Interest on a Zero Balance
...

carlachloe

thanks guys, would have been nice if they had told me I would be getting charged on anything I bought thereafter though cause then I could have just used my other card that is sitting with nothing on it and saved myself £20. Will get in touch with them to see if there is anything they will do its RBS by the way. Thanks again.

grumbler

carlachloe wrote:

...RBS by the way...

No need to read long credit agreement. Summary Box :

Interest Free Period Maximum 59 days for purchases if you pay your balance in full and on time, and have paid the previous month’s balance in full and on time - no interest free period on cash advances or money transfers. Interest free period on balance transfers only applies to the introductory period.

Moggles_2

... last month payment was 2 days late due to me not being well.

Of little consolation now, but as a customer of 4 years standing with a perfect payment history, it was worth a call to Customer Services before the payment due date. They may well have waived the late payment charges. Obviously this would be open to abuse, so you can't expect to get away with it more than once!

Because you can never discount illness, it's best to set up your account for online payment. RBS accept payment by debit card over the phone as well and this is usually the quickest means of payment if you've left it late. Also, please consider setting up a direct debit.

Best of luck with your negotiations
M

carlachloe

grumbler wrote:

No need to read long credit agreement. Summary Box :

Thanks for that.

Its so confusing to me though I didnt realise they could charge you on things you buy for the entire following month, fair enough things that you had bought when the payment was late but to be two days late then charged interest on everything you buy for the next month. Even from the section you have put in the summary box I wouldnt read that as they would do this but I get baffled very easily!! Thank you very much for all your help I really appreciate it.

sdj25

Interest Free Period Maximum 59 days for purchases if you pay your balance in full and on time, and have paid the previous month’s balance in full and on time - no interest free period on cash advances or money transfers. Interest free period on balance transfers only applies to the introductory period.

Not always 59 days - you are quoting Halifax if I were to hazard a guess. The majority of front runners (barclays, mbna, lloyds, natwest) have interest free days of 56days.

Unlucky Egg customers only get 45 days!

Milarky

sdj25 wrote:

Not always 59 days - you are quoting Halifax if I were to hazard a guess.

No, he's quoting RBS.

sdj25

you win some...