Tesco credit card, surprisingly high interest charge

jack530

I have a Tesco credit card, on which I do pretty much all my spending on, then pay the full balance every month. This system has meant me not paying any interest, but getting Tesco clubcard points (which become vouchers to spend in Tesco).

On my early August statement, the total balance was £800.85, and I didn't quite have enough money that month to pay it all off, I paid £775.

The next month lots of expenses came up, and on my early September statement, I had spent £1,510.88. I was expecting to pay a small amount of interest, less than a pound, on the £25ish that I had not paid off from August, but what they appear to have done is charge me monthly interest in my total balance on the 6th September statement date: My total balance was £1,535.94 and I got a £23.77 interest charge.

So it looks like they charge a whole month's worth of interest based on the balance on the statement date, even though much of that money was spent only a few days before the statement. Is this normal? I thought credit cards gave you roughly a month interest-free, is that not correct? Hypothetically, if I had spent £10,000 on the card on 5th September, paid it all off on 7th September, would they have charged me a full month of interest on it all?

andyuk101_2

Interest accrues from the date of purchase and is added to your balance unless you pay in full

In this case you've paid interest on £800ish not the £25 remaining, all cards work like this

You'll need to pay in full for 2 months to stop paying interest now

jd87

From the Tesco credit card statement summary box:

Interest free period - Maximum 51 days for purchases if you pay your balance in full and on time, and have paid the previous month's balance in full and on time.

Your mistake was not paying your August balance off in full. Now you pay interest on everything until you pay off in full again. Then you will still have residual interest the following month too.

bengal-stripe

You didn't pay it off in full, so interest will be charged. On the outstanding £800 up to the day your payment of £775 got credited. Then interest on £25 to the day the statement was compiled. On the new purchases interest is due from the day of purchase to statement date.

If you pay this month in full, there still will be a little bit of 'trailing interest' in the next bill. (Covering the time span between the date the statement got compiled and the day the payment actually got booked).

jack530

Thanks everyone for the responses - this makes sense now.