Techie Question - Interest Rates

Cardinal-Red

I took advantage of Barclaycard's 2.9% Life of Balance transfer offer sometime ago and paid about £4000 onto the card (balance was £0 before) and have been paying it off since.

(0% cards not an option because of some refusals (problems now sorted on credit files and my housing status - am waiting for searches to fall off before stoozing again)

Anyway just looked at my February 2005 statement and it reads:

Remaining Balance: £1956.80
Estimated interest next month: £7.54

Now forgive me if I am making mathematical errors, but I calculated (on the basis of no payment being made):

Annual Interest on this balance = £7.54 * 12
= £90.48

2.9% of Balance = 1956.80 * 2.9%
= £56.74

Now I know this is 'only' £35 but the principle is important here.

So my question is:

a) Is there a flaw in my calculations; and/or
b) What should I do about it?

Thanks!

stuwilky

The difference could be because you are paying standard rate interest on the interest which has already been charged, which Im guessing is pretty significant?

Although I dont actually know.

johnllew

If all you have is the balance transfer on your account, as reduced by monthly payments, and no purchases, fees, insurance etc, then the interest is wrong.

My wife has over £2.5k remaining on a 2.9% LOB offer and the interest charged last month was £6.32, with £6.21 the estimated interest for next month.

Ask them to reconcile the interest - you may be entitled to a refund.