Credit Card Interest

madnes

Hi there.

I use my credit card and repay the full balance of each month. I use a crapone card. 34.9apr. (Yes I know it is high and the wrong card.
I choose to have it as it suits me).
Last months statement, Balance £631.17 " Next months Estimated interest £15.71"
I paid £601.31 (misread the statement). They charged me £18.73 interest. I have just queried this with "David".. Off shore contact center.

He advised me this was correct. I asked him for the breakdown of how they come to this figure. I based £18.73 if I just repayed the minimum amount as per there statement prints. Davids reponse was I was not listening I need to understand maths. My reponse was I did not wish to continue the conversation with him. The phone was put on hold and he come back telling me they has waived the full interest.

Please would someone explain this to me.

izools

The interest is calculated on the average daily balance, or on the daily balance.

Barclaycard for example, add up the balances at the end of each day then divide this figure by the number of days in the statement period, giving the average daily balance. Interest is then added to this figure and applied when the bill is produced.

Others, Cap One too, probably, calculate 1/365th of your APR to the balance at the end of each day in the billing cycle and add it in one transaction when the bill is produced.

So if you spend most of the month at #600 balance the interest would be much higher than if you spend only one day at #600 balance and the rest close to zero.

The amount you repay doesn't affect this. (Unless of course you pay the full statement balances)

I would personally thank your lucky stars that Capital One waived the interest as they were under no obligation to. I would suggest setting up a direct debit for the full amount so that this doesn't happen again.

YorkshireBoy

madnes wrote: »

Please would someone explain this to me.

The estimated interest figure is based on certain assumptions (all detailed on your statement), one of which is the balance remains static.

You continued to use the card and hence the (interest bearing, because you didn't clear the last statement in full) balance increased, thereby affecting the interest accruing.

madnes

izools wrote: »

The interest is calculated on the average daily balance, or on the daily balance.

Barclaycard for example, add up the balances at the end of each day then divide this figure by the number of days in the statement period, giving the average daily balance. Interest is then added to this figure and applied when the bill is produced.

Others, Cap One too, probably, calculate 1/365th of your APR to the balance at the end of each day in the billing cycle and add it in one transaction when the bill is produced.

So if you spend most of the month at #600 balance the interest would be much higher than if you spend only one day at #600 balance and the rest close to zero.

The amount you repay doesn't affect this. (Unless of course you pay the full statement balances)

I would personally thank your lucky stars that Capital One waived the interest as they were under no obligation to. I would suggest setting up a direct debit for the full amount so that this doesn't happen again.

If they had explained it like this they I would have understood. Its the first time in years I have been charged interest. I understand they had no obligation. I never asked for this, just wanted a clear understanding.

izools

Fair enough. Having very recently become a capital one customer myself I understand your frustration. They must have one of the worst customer service I have ever come across in my life, even worse than Barclaycard from what I've experienced.

Still I've got a DD set up to pay the full amount each month so hopefully I'll never have to speak to them about anything

Glad my explanation made sense!

madnes

izools wrote: »

Fair enough. Having very recently become a capital one customer myself I understand your frustration. They must have one of the worst customer service I have ever come across in my life, even worse than Barclaycard from what I've experienced.

Still I've got a DD set up to pay the full amount each month so hopefully I'll never have to speak to them about anything

Glad my explanation made sense!

Honestly m8, Every time I call them, which is rare. All they want to do is argue!!

I was off sick back December until March. Due to a fall. I claimed under there PPI with is underwritten by AXA. It took 4 months for them to pay it. Capital One Blamed AXA and AXA lost documents I sent to then by recorded delivery.
I complained to Cap One, As I pay them for the PPI as they sold it to me and there complaints team were adamant I was at fault. Only when I asked for the refferal to the ombudsman did she then agree to speak to AXA on behalf.