Post Office Platinum Card

Shoegirladdict

Hi all,

This is my first post on here, although I am bit of a lurker! I just wanted to warn member about my own situation.

I only have a credit card for using overseas and I always pay it off immediately. This website recommended a Post Office Platinum Card and I've had one for quite a few years without incident. However, when returning from holiday this year, the bill was a little higher than usual so I thought I would split the bill- pay half now and half the following month. There would be a bit of interest to pay, but only on half the bill so that was fine.

When the bill arrived, the interest seemed high so I rang to check it. Apparently, if you run up a debt on your Post Office Platinum Card in any month (say £3000), if you don't clear the whole amount in one month, the Post Office will charge you interest on the WHOLE amount (ie. £3000) until the whole debt is cleared. So, if i pay off £2000 of thr £3000 debt, i wont just pay interest on the remaining £1000. I will pay interest on £3000 until i pay off the remaining £1000. This means I am paying interest on the outstanding balance PLUS the amount already paid off. I'm paying interest on money I don't owe!

I've never had this before on any credit card I've had, although I've only ever had a couple, but this seems ridiculous to me. If we were unlucky enough not to be able to afford to clear the bill in one or even two months, the interest payments could prevent you ever having it paid off. This is apparently in the terms and conditions of the card, so I am just drawing this situation to your attention. I have complained to the Post Office and await their response with baited breath.

dazza.mk

Shoegirladdict wrote: »

Hi all,

This is my first post on here, although I am bit of a lurker! I just wanted to warn member about my own situation.

I only have a credit card for using overseas and I always pay it off immediately. This website recommended a Post Office Platinum Card and I've had one for quite a few years without incident. However, when returning from holiday this year, the bill was a little higher than usual so I thought I would split the bill- pay half now and half the following month. There would be a bit of interest to pay, but only on half the bill so that was fine.

When the bill arrived, the interest seemed high so I rang to check it. Apparently, if you run up a debt on your Post Office Platinum Card in any month (say £3000), if you don't clear the whole amount in one month, the Post Office will charge you interest on the WHOLE amount (ie. £3000) until the whole debt is cleared. So, if i pay off £2000 of thr £3000 debt, i wont just pay interest on the remaining £1000. I will pay interest on £3000 until i pay off the remaining £1000. This means I am paying interest on the outstanding balance PLUS the amount already paid off. I'm paying interest on money I don't owe!

I've never had this before on any credit card I've had, although I've only ever had a couple, but this seems ridiculous to me. If we were unlucky enough not to be able to afford to clear the bill in one or even two months, the interest payments could prevent you ever having it paid off. This is apparently in the terms and conditions of the card, so I am just drawing this situation to your attention. I have complained to the Post Office and await their response with baited breath.

This is pretty much a standard term on all credit cards.

Shoegirladdict

Really?? I show my ignorance as I've never come across this. How disgusting! Thanks for filling me in to this appalling practice!

chanz4

Nope just in the terms and conditions

Tixy

Its not generally consisdered an appalling practice - its how credit cards work. Consumers effectively are borrowing money from the credit card company and are charged interest for doing so.

You are charged interest on your daily balance from the date of your purchase to the date you pay for the purchase.

So you are not paying interest on something that has been paid off - the interest relates to the period before you paid it off.

Most credit cards offer a special concession that only use your card for purchases, and if you pay off your card in full before the due date then they will not charge you interest. This is what you have experienced before but all cards (except promotional deals) charge interest in the way you have experienced this time.

Shoegirladdict

Sorry all. I've never come across this before. I get a bill, pay half the balance and the following month pay interest, not on my current balance but on the balance from the previous month. That is money I no longer owe as I paid half of it off the previous month. I think it's appalling!

Tixy

You are only being charged interest for the period of time you borrowed the money.

As with many things in life - you pay the interest 1 month in arrears. As the credit card company do not know how much interest will will be due until the end of that statement month.

As a comparison -
say in April you go abroad and use your phone for many calls - this might cost £100.
In May you stay in the UK and use your phone for half a dozen calls - this may only cost £25.
Your phone company generate your bill for April at the start of May and you have to pay the £100 owed in May.
You cannot turn around and say - its appalling I only used the phone a tiny bit in May and have to pay for calls I made last month.

Shoegirladdict

Hi, that's not what the Post Office (well, Bank of Ireland) told me. They said I would pay interest on the whole amount (from my example £3000) until I had paid every penny of it off. If I just pay another £500 leaving only £500 debt then i will still pay interest on the full £3000 until it is zero. That's not decreasing interest, or even interest on money owed, that is interest on money not owed.

Tixy

Obviously I don't know how they explained it to you on the phone. But what will happen, what does happen, is that interest is calculated daily based on the amount outstanding. Once part of the balance is paid off then the daily interest cost will be lower (assuming no further spending).

Shoegirladdict

Tixy, that I can live with but that isn't what I was told. Fingers crossed that the complaints service works and I end up with the far more reasonable situation you are describing.

bigadaj

I think this is a misunderstanding on your part. If you pay the whole balance then interest is waived, anything less and you pay interest on the whole amount for that month, my miss us mistakenly underpaid by a few pence and accrued interest on the whole balance.

In your example at say two per cent On three grand the interest would £60. If you paid two thousand off the interest would be applied, and the following month you would accrue twenty pounds and sixty pence interest, if you paid one thousand and twenty one Pounds in the second month then no further interest would accrue.
Generally have things paid by direct debit now, but when paying by cheque I always rounded up to the next pound to make sure I didn't accrue interest in this manner.