Question about how credit card interest works

shortcrust

I've done a bit of searching but can't find an answer I can understand so I'm hoping you can help be with a question about card interest. Sorry if this should be obvious!

Say my credit card balance in June was £100 and I only paid £50. I then buy something for £500 in July and pay off the full balance of £550 and a bit when the July bill arrives. Am I then charged interest only on the £50 that was left from June, or do I also get charged interest on the £500 purchase?

Hope that makes sense.

[Deleted User]

You're charged interest on the £500 until you pay if off in full' as you didn't clear the previous month in full.

shortcrust

Deleted_User wrote: »

You're charged interest on the £500 until you pay if off in full' as you didn't clear the previous month in full.

Thanks for the quick reply! That's what I thought. I'll pay it early to avoid the interest.

katejo

Deleted_User wrote: »

You're charged interest on the £500 until you pay if off in full' as you didn't clear the previous month in full.

Not quite right. You will be charged interest on the full £600 (ie. the initial £100 and the £500 because you only paid off £50. It could even be slightly more if the £100 June balance included any carried over from May.

[Deleted User]

True. But I was just answering in regard to whether or not the £500 attracted interest.