Credit card cash interest

shamussy

Hi, now, I have a cc with a balance of 2500. each month i pay off the interest but usually go over the limit. I have just started to sort my finances out and contacted the company about the interest which has been accrued. I havent taken any of cash out since january 2010 and the company have told me that 2430 of the balance is cash rate which is 10% higher than purchases. My actual cash limit has always been 1250 so i find it hard to understand why i have such a high rate. they weren't particularly helpful on the phone saying its a rolling rate. Is there anything i can do?

happycamel_2

Generally I think repayments go on non cash borrowing (ie interest and items you've bought) so until you totally clear the card the cash borrowed will keep accruing interest. It sounds like they also charge a 10% higher rate for cash than purchases making it even harder to clear your debt.

From what I can see you need to clear the whole balance of £2500 (bearing in mind the balance is increasing everyday due to the interest so you are chasing a movig target).

curlytop12

any chance you could switch to a 0% balance transfer card and set up a direct debit to pay it each month?:)the interest on withdrawing cash from a CC is terrible.

shamussy

I would like to get 0% but think because of my credit history (continuously going over limit) it isnt possible.

shamussy

i still dont really get how it got to 2599, at some point the cash level must have been at 1700 say and i cd take out cash? does all of the interest count as cash too?

UnionGirl

Which company is the credit card with?

It was my understanding that the legislation in regard to hierarchy of credit card charges was changed this year. Which means that companies can no longer leave the highest rates to last, they must put payments towards the highest (cash withdrawals) rates FIRST.

Tixy

What do you use the credit card for?
as well as cash withdrawals certain other transactions count as cash - eg gambling websites.

Lenders used to pay off purchases before cash withdrawals but that has now changed and any repayments will pay off the cash withdrawals first.

Why are you going over limit every month? thats crazy and will be costing a fortune in fees. Get yourself back under the limit, low enought that when they add on this months interest & charges you are still under the limit and make sure you don't use the card again. Thats your priority now and then you can look at the interest rate and whether it is correct.

You could write to them to ask them how the balance is broken down into cash transactions and purchase transactions and which transactions make up each balance.