Vanquis - how have they calculated their interest?

tiger5000

Hello All,
I have just been promised a call back from Vanquis as the matter I have raised with them is complex. I called them to ask for somebody to explain to me how they have calculated their interest on my latest statement.
About a week ago, I called them about the same thing, and they sent me a letter to "explain" how interest is calculated. Useless letter - it just confirmed what they told me over the phone!
Anyway, the letter cites:
"Purchase Interest
A Purchase Transaction means a transaction with a merchant displaying the Visa sign, for goods and/or services paid for with your card. With Purchase Transactions, the interest free period is up to 56 days. Purchase interest is calculated on the average daily balance during the statement period"
The bit that I thought was key to it all was the "average daily balance" bit, so I put it all into a spreadsheet, and got Excel to work it out for me! Would somebody be kind enough to check and confirm if I have an argument? I'm using a load of dots to pad it out as straightforward copy/paste doesn't seem to work too well.

Date..........Description..........................Credit......Debit......Balance
09/03/2011.Balance from previous month............................£1,730.76
10/03/2011...................................................................£1,730.76
11/03/2011...................................................................£1,730.76
12/03/2011 Debit..............................................£71.47....£1,802.23
................Debit..............................................£20.00....£1,822.23
................Debit..............................................£40.00....£1,862.23
13/03/2011...................................................................£1,862.23
14/03/2011...................................................................£1,862.23
15/03/2011...................................................................£1,862.23
16/03/2011...................................................................£1,862.23
17/03/2011...................................................................£1,862.23
18/03/2011...................................................................£1,862.23
19/03/2011.Debit..............................................£70.61....£1,932.84
20/03/2011...................................................................£1,932.84
21/03/2011...................................................................£1,932.84
22/03/2011...................................................................£1,932.84
23/03/2011...................................................................£1,932.84
24/03/2011...................................................................£1,932.84
25/03/2011...................................................................£1,932.84
26/03/2011.Debit.............................................. £36.15...£1,968.99
27/03/2011...................................................................£1,968.99
28/03/2011...................................................................£1,968.99
29/03/2011.Debit..............................................£6.99......£1,975.98
30/03/2011...................................................................£1,975.98
31/03/2011.Credit................................£931.82...............£1,044.16
01/04/2011...................................................................£1,044.16
02/04/2011 Debit..............................................£10.00....£1,054.16
................Debit..............................................£44.58....£1,098.74
03/04/2011...................................................................£1,098.74
04/04/2011.Debit..............................................£3.54......£1,102.28
................Credit................................£77.00.................£1,025.28
05/04/2011...................................................................£1,025.28
06/04/2011.Debit..............................................£23.80....£1,049.08
07/04/2011.Debit..............................................£9.58......£1,058.66
08/04/2011.Repayment Option Plan......................£14.91....£1,073.57
................Interest..........................................£97.63....£1,171.20

So, by my calculations, the average daily balance is £1,652.65. The interest of £97.63 on the statement states that the interest is 3.991% per month. Based on this, I get the interest to be around £66, not £97.

DermotFlanigan

I cant believe you have that amount on a vanquis card :eek:

tiger5000

I know. Its under control though.

KingElvis

Blimey, can't help on the interest but that Vanquis balance is terrifying, simply horrifying :eek::eek::eek:

Vanquish seem to have their own "unique" methods of fleecing their customers, sorry, calcualting their interest.

Russe11

Is it not the simple case of interest is charged on the whole month whether you have paid it off early or at the end of the billing cycle.

cse

The only thing I can think of is that it's not all being charged at purchase rate. Is any of the balance from the previous month composed of cash transactions at a much higher rate?

tiger5000

Well, every other month, I've paid the balance in full, so the month I've listed is the only month where I've owed anything. That was the only month where I knew I wouldn't be able to pay the balance, so I knew I'd be taking a 'hit' on the interest - just not that much! When they produce their next statement, I'll be in a position to pay it all as normal.
I agree, it looks horrifying, but I'm fine with it.

izools

You're charged interest for the balances present between payments.

So if one month, you pay one day after the statement is produced, but the next month you pay a fortnight after the statement is produced, the subsequent months' interest will be more because of the timescales involved - as you know, interest is calculated daily.

....... You're paying for Repayment Option Plan as well as carrying a balance!? :eek:

tigerlily44

izools wrote: »

You're charged interest for the balances present between payments.

So if one month, you pay one day after the statement is produced, but the next month you pay a fortnight after the statement is produced, the subsequent months' interest will be more because of the timescales involved - as you know, interest is calculated daily.

....... You're paying for Repayment Option Plan as well as carrying a balance!? :eek:

Why is it that my statements take the full amount every month on the 1st? I never therefore get the 56 days because I never leave a balance as I am scared of the interest - but the statement is produced 30 days apart not 56. My partner has an HSBC Mastercard and gets the 56 days but I don't.

If anyone understands this please explain

thanks

tiger

izools

tiger, if you make a purchase on the 15th April, it will appear on your statement dated 14th May and be taken on your 1st June direct debit.

56 days.

DizzleUK

All you need to know (with any credit card) is that interest is calculated on a DAILY basis. For simplicity, interest only shows up on your statement once each month.

E.g.

January 1st: £1000.00
January 2nd: £1000.05
January 3rd: £1000.10
etc etc

If you don't pay your balance in full every month, interest accrues from the date of purchase for each transaction, not a fixed percentage of your last statement added to the next.

Oh and forget all about "average balance" for calculating how much interest may be due.