Interest charges - Quick Question

sandybrag

Websites always encourage you to pay off your balance in full before your next statement to avoid paying interest

However, how is that possible if interest is being calculated on a daily basis?..

Surely if say I had £1000 on my card for the whole month, and paid it off the day before my next statement, I would still be charged interest on every day that I had £1000 on the card?.

Sorry, Im sure to some this is a dumb question, but quite new to all this.

Sandy x

YorkshireBoy

Purchase interest is waived if you settle your bill (of purchases only, ie no cash advances) in full, ie "up to 56 days interest free".

opinions4u

Nearly all credit cards charge no interest as long as you clear the balance in full within the stated period (often around 25 days from the date of the statement being issued, therefore "up to 56 days" from the transaction date).

If, however, you don't clear the balance in full in month 1, you will be charged interest. If you then clear the balance and interest in full in month 2, you will still carry a little interest over to month 3. Clear that balance in full and you're back to no interest charges again.

Hope that makes sense.

25+ years of holding a credit card and I've never paid a penny in interest.