Don't understand credit card?

Bossworld

Hi, have got a natwest student mastercard, i'm currently still in the black on current account so have been using it as a tool to build up a credit history (if this is the right thing to do?) also used for online/electrical purchases for the comeback if it goes wrong.

It's supposed to take the full amount out at the end of the month because it's a student one, although last month I went into the branch to pay it off myself because I couldn't find any confirmation of this.

Anyway, I paid off the amount due in full before the deadline as well as anything else I had spent up to that point, but just checked today and I've paid interest of 1p and 10p. I don't understand why; i thought purchases after a cut off date weren't put on until next month? Or is it just the fact that I had anything on there at all?

Date	 Type	 Description	 Value	 Balance
				
				
				
1-Sep-06		'STATEMENT 	£ 0.00	
11-Sep-06			£ 50.00	
11-Sep-06			£ 15.00	
21-Sep-06			£ 30.00	
28-Sep-06			£ 21.30	
28-Sep-06			£ 22.40	
29-Sep-06			£ 135.00	
2-Oct-06			£ 5.00	
6-Oct-06		'STATEMENT 	£ 0.00	
9-Oct-06			£ 30.28	
9-Oct-06			£ 20.00	
9-Oct-06			£ 2.50	
9-Oct-06			£ 22.00	
16-Oct-06			£ 42.00	
16-Oct-06		'PAYMENT RECEIVED THANK YOU	-£ 353.48	
18-Oct-06			£ 17.89	
25-Oct-06			£ 95.99	
25-Oct-06			£ 4.79	
26-Oct-06			£ 10.94	
6-Nov-06		'INTEREST 	£ 0.10	
6-Nov-06		'INTEREST 	£ 0.01	
6-Nov-06			£ 3.49	
6-Nov-06			£ 11.60	
6-Nov-06			£ 26.99	
6-Nov-06		'STATEMENT 	£ 0.00	
6-Nov-06		'Balance as at 06 Nov 2006		213.8

dreamalittle

Have you paid for anything with it that might be counted as a cash advance? Interest is charged on that sort of thing immediately. My parents were confused by small amounts of interest on their credit card, and it turned out that they were paying for their Littlewoods Pools entry with it, which was counted as a cash advance because it's gambling.

Bossworld

dreamalittle wrote:

Have you paid for anything with it that might be counted as a cash advance? Interest is charged on that sort of thing immediately. My parents were confused by small amounts of interest on their credit card, and it turned out that they were paying for their Littlewoods Pools entry with it, which was counted as a cash advance because it's gambling.

Hi, used it for 20 out of an ATM because it avoided the charge (although then obviously i got hit for the cash advance charge so worked out more expensive) :rolleyes: but that counts for the £2.50 charge on the bill, not the interest :S

dreamalittle

That'll be it then. I think if you check the terms on your card, they charge a fee and interest from the day you take cash out.

King_Of_Fools

Bossworld wrote:

Hi, used it for 20 out of an ATM because it avoided the charge (although then obviously i got hit for the cash advance charge so worked out more expensive) :rolleyes: but that counts for the £2.50 charge on the bill, not the interest :S

You will also have to pay interest from the day of the ATM transaction as well as the cash advance fee!

grumbler

Hi
I cannot give you the exact explanation. However, I think there could be only two reasons of the interest (without late payment charges):

• You used the card to draw cash or for some transactions treated as 'money transfers' (more likely). Check your T&C for a definition of 'money transfers'.
• You have paid the balance on time, but not in full

A few unrelated comments:

Bossworld wrote:

Hi, have got a natwest student mastercard, i'm currently still in the black on current account so have been using it as a tool to build up a credit history (if this is the right thing to do?)

This is the right thing to do, although the result would be the same as if you just have a CC and don't use it all.

It's supposed to take the full amount out at the end of the month because it's a student one,

It is better to pay the balance in full to avoid interest. However, generally you are not supposed to do this and can make only minimum payments (not recommended!).

...I paid off the amount due in full before the deadline as well as anything else I had spent up to that point,

Generally, if you use the card only for purchases, there is no point in paying more than the previous balance. If you pay the balance in full and on time every month, no interest is added.

Bossworld

grumbler wrote:

Hi
I cannot give you the exact explanation. However, I think there could be only two reasons of the interest (without late payment charges):

• You used the card to draw cash or for some transactions treated as 'money transfers' (more likely). Check your T&C for a definition of 'money transfers'.
• You have paid the balance on time, but not in full

A few unrelated comments:
This is the right thing to do, although the result would be the same as if you just have a CC and don't use it all. It is better to pay the balance in full to avoid interest. However, generally you are not supposed to do this and can make only minimum payments (not recommended!).
Generally, if you use the card only for purchases, there is no point in paying more than the previous balance. If you pay the balance in full and on time every month, no interest is added.

Ok cheers so looks like interest charged for the cash withdrawel until the amount was paid off at the end of that statement date? or is it as soon as the balance is cleared?

cheers for the help all of you

grumbler

Summary box

Interest charging information:

The periods over which interest is charged are:

Cash Advances:
From Transaction Date
Until Repaid in full

If you draw cash the sooner you pay back the better.
See also Allocation of payments in the Summary Box. Cash advances are last in the list.

King_Of_Fools

Bossworld wrote:

Ok cheers so looks like interest charged for the cash withdrawel until the amount was paid off at the end of that statement date? or is it as soon as the balance is cleared?

The interest shown will be that for the time between the ATM transaction date (9th October) and the statement date (6th November).

There will be further interest shown on you next statement between the time of the statement date (6th November) and the date your full payment is received.

galileo

The lesson to learn here is never ever ever withdraw cash on a credit card unless you really need to...