Credit Card Interest Alert!

redparaman

I am pretty good with finances these days. I have an M&S Mastercard and use it for large purchases and always settle the bill in full before the final payment day is due each month. Last month the bill was 2081 pounds. I was overseas at the time and paid 2000 pounds off the account, leaving 81 pounds. My statement arrived yesterday with the 81 pounds outstanding plus interest of 57.50 pounds! When I challenged M&S they stated that interest is charged on the whole amount that was due NOT the small balance carried forward. The statement shows interest charges on the reverse but it is not that clear. I challenged the charge and it was immediately removed as a gesture of good will! Am I the only one to feel aggrieved. With some users owing huge sums and finding it difficult to pay their debts are they only going to become even more in debt within a short space of time! The call centre informed me this is common practice amongst credit card companies.:mad:

Rupert_Bear

Has been common practice for a long time now with the majority of cc companys. All in the terms and conditions.

redpete

The call centre was right, all CCs I have had work like that.

I don't understand why you put the angry face on your post - you've ended up paying no interest at all and now you know how the interest is worked out.

[Deleted User]

Normal practice. You borrowed £2081 for a month and they charged you interest for it. This month, assuming you don't spend more, you'll only be borrowing £81 so will only pay interest on that.

You're extremely lucky they did you a favour.

ILW

redparaman wrote: »

I am pretty good with finances these days. I have an M&S Mastercard and use it for large purchases and always settle the bill in full before the final payment day is due each month. Last month the bill was 2081 pounds. I was overseas at the time and paid 2000 pounds off the account, leaving 81 pounds. My statement arrived yesterday with the 81 pounds outstanding plus interest of 57.50 pounds! When I challenged M&S they stated that interest is charged on the whole amount that was due NOT the small balance carried forward. The statement shows interest charges on the reverse but it is not that clear. I challenged the charge and it was immediately removed as a gesture of good will! Am I the only one to feel aggrieved. With some users owing huge sums and finding it difficult to pay their debts are they only going to become even more in debt within a short space of time! The call centre informed me this is common practice amongst credit card companies.:mad:

I would suggest that in most cases that is their own silly fault.

redparaman

redpete wrote: »

The call centre was right, all CCs I have had work like that.

I don't understand why you put the angry face on your post - you've ended up paying no interest at all and now you know how the interest is worked out.

I was unhappy that interest was being charged on 2000 pounds that had been paid within the time requested! The interest charges on the reverse of the statement are not that straightforward! Yes the charge was waivered but there maybe other readers who were unaware of this practice!

redparaman

My point is that the 2000 pounds was repaid before the payment due date, only the 81 pounds was outstanding (which has now been paid in full). That is why I objected to paying interest on the total amount.

Rupert_Bear

redparaman wrote: »

I was unhappy that interest was being charged on 2000 pounds that had been paid within the time requested! The interest charges on the reverse of the statement are not that straightforward! Yes the charge was waivered but there maybe other readers who were unaware of this practice!

Pleased for you that the interest charges were refunded but no one in any company has the right to go against company policy.

It is not treating customers equally.

Esoog

Rupert_Bear wrote: »

Pleased for you that the interest charges were refunded but no one in any company has the right to go against company policy.

It is not treating customers equally.

I'm sure there's a policy regarding waiving fees to be honest, 1st offence/good customer no doubt. I don't expect one lowly employee is going to "go against company policy" on a whim since it's probably more than their job is worth.

redparaman

Esoog wrote: »

I'm sure there's a policy regarding waiving fees to be honest, 1st offence/good customer no doubt. I don't expect one lowly employee is going to "go against company policy" on a whim since it's probably more than their job is worth.

I think there probably is a set of guidelines. I have always paid in full in the past! As most call centres the operator was clearly following a script. As I said my main gripe is being charged interest on an amount paid before its payment due date.

Eydon

But this is how credit cards work - and always have.

Interest is always calculated on any purchases that you make, from the date you make them until the date you pay it off. However, in the special case where you pay the full balance by the due date then the interest is waived.

You were very, very lucky to get the interest refunded.