Residual Interest

paolo34

Just cleared a virgin credit card and went to cancel the card, but was told I have to pay a residual interest charge before it can be cancelled!? Reading the small print etc would probably have been a good idea before getting the card etc however I've done a bit of research on this but was wondering if anyone else has had this problem?

I've had 2 other credit cards, Lloyds and Nationwide, in the past and neither have ever had these charges.

[Deleted User]

They will all have operated in the same way. If you carry a balance for consecutive months, there will always be a small amount of interest to pay after you have finally cleared it (as the statement balance is only accurate for the day the statement was produced, and interest continues to accrue until you pay it off.)

CLAPTON

Interest is charged form the day you spend to the day to pay the amount off.
if however you pay in full each and every month then the interest is not charged

so if you don't always pay in full the interest will be charged
the statement you receive will show the interest up to the statement date
so even if you this pay statement in full you are charged interest from the statement date to the date you make the payments (residual interest)

once you pay in full for two months no further interest is charged


all cards work this way

Fruit_and_Nut_Case

paolo34 wrote: »

Just cleared a virgin credit card and went to cancel the card, but was told I have to pay a residual interest charge before it can be cancelled!? Reading the small print etc would probably have been a good idea before getting the card etc however I've done a bit of research on this but was wondering if anyone else has had this problem?

I've had 2 other credit cards, Lloyds and Nationwide, in the past and neither have ever had these charges.

Lucky for you that Virgin advised you of this! There are loads of posts here from people who think they've paid off their accounts and cancelled direct debits only to be hit with unexpected charges down the line.

P.S. It's perfectly normal.

Rupert_Bear

From MBNA.
If you have a promo rate in progress and you use the card for every day purchases it would appear then you do not qualify for an interest free period and pay interest from day of purchase.


To take advantage of the interest free period that MBNA offer on purchases you would need to clear your total account balance in full every month. If you only pay your retail balance when you also have a balance transfer this will not be seen as a full balance payment and as such you will have interest charged on your purchases. If you do clear your total account balance on time every month, we will charge you no interest on your purchases.

thenudeone

What problem?

You borrow money.

Until you pay it back, you're charged interest for every day.

Which part of that arrangement did you not understand when you signed up for the credit card?

paolo34

@thenudeone - I simply wanted to know if anyone else had had experience with this. calm down

thenudeone

paolo34 wrote: »

I simply wanted to know if anyone else had had experience with this.

Yes. Everyone else who didn't pay off their last-but-one card balance in full but has now paid off the full balance.

dubdub88

Hi all,

I'm seeing residual interest on my statements even though I have paid off the full balance. Why am I still seeing interest on the next month? And why is there estimated interest on my statement?

Regards,

dubdub88

[Deleted User]

dubdub88 wrote: »

Hi all,

I'm seeing residual interest on my statements even though I have paid off the full balance. Why am I still seeing interest on the next month? And why is there estimated interest on my statement?

You post is a bit lacking in detail, but basically you'll have two month's statements with interest to pay, then it's all clear again.

The estimated interest shows as an assumption you make only min payment and is generally not over-ridden, even when there is only a small amount owing.

CLAPTON

dubdub88 wrote: »

Hi all,

I'm seeing residual interest on my statements even though I have paid off the full balance. Why am I still seeing interest on the next month? And why is there estimated interest on my statement?

Regards,

dubdub88

how do you know it is residual interest?

you need to pay off the full balance on two consecutive month before interest stops assuming no cash or cash like transactions


estimated interest is based on the assumption you only pay the minimum