Monthly rate changes but annual doesn't?

Darren_G

I have a Co-Op credit card, which is a legacy product after they took over my Northern Rock mortgage linked card.

I was a bit confused by my latest statement, as despite paying much more than the minimum balance (and not spending on it) , I noticed my predicted interest for next month was going to be more than it was this month - on a reduced balance.

I looked at the 'interest rates explained' sheet - didn't tell me anything - but I noticed that although the annual rate column was the same as the previous month, the monthly rate was actually about half a percent higher that the previous month. Is this a 'stealth increase' or is it normal for this to happen? I've never noticed this before myself.

opinions4u

The accounting period for each statement has a different number of days.

Interest is calculated daily.

Providing the actual rates (old and new) would help.

lisyloo

I noticed my predicted interest for next month was going to be more than it was this month

Probably 29 days in Feb, 31 in March.

YorkshireBoy

Darren_G wrote: »

I noticed that although the annual rate column was the same as the previous month, the monthly rate was actually about half a percent higher that the previous month. Is this a 'stealth increase' or is it normal for this to happen?

It would be unusual, indeed impossible, for one to change without it affecting the other.

Could you post up both rates quoted on your last 3 statements?

Darren_G

YorkshireBoy wrote: »

It would be unusual, indeed impossible, for one to change without it affecting the other.

That is what I thought too..

Rate history as follows:

March - 8.1% annual, 0.649% monthly
February - 8.1% annual, 0.600% monthly
January - 8.1% annual, 0.649% monthly
December 2011 - 8.1% annual, 0.649% monthly

So it looks like the inconsistency was actually in February. As I generally only look at the value of the interest, I would have expected it to decrease with a decreasing balance, which is probably why I missed it.

Still seems strange. Never really been impressed with the Co-Op since they took the cards over. They soon snook in a monthly fee of £6 that NR never had, but as the interest rates are very good for something I am not likely to spend on again, I have put up and shut up. Sadly, the balance is still a bit too big for me to consider transferring to 0% deals in one go.

Darren_G

Thanks to all - sometimes you just need a little external perspective for things to become clear!

YorkshireBoy

Darren_G wrote: »

So it looks like the inconsistency was actually in February.

Well you could try calculating if they've actually applied 0.600% to your Feb statement. Should be fairly easy with a static balance and knowing the number of days in the statement period.

You never know, it may just be a misprint?

agrinnall

I don't think there's anything wrong with this, for the three months with 31 days the daily interest is 0.0209%, for February with 29 days it's 0.0207%, if they work to 3 decimal places then they are all 0.021% per day.