Interest on zero balance?

wendym

My interest-free period on a NatWest card was due to end, so I paid off the balance (£400-odd) by the due date.

I now have a bill listing the payment in full, but charging £2.50 interest on a balance of zero. I have just wasted 10 minutes on the phone, and have decided to cut my losses and pay, to avoid incurring a late payment charge. I'll then cancel the card.

Just out of interest, can anyone guess what's going on? A mistake by them, a try-on, or a brilliant stroke of Kafa-esque accounting?

jonesMUFCforever

How was your offer worded? This is very important.

eg Interest free until statement DATE is not the same as Interest free if you pay by x date.

Mbna do this regularly give you an interest free period until say August statement which in effect to prevent me paying interest I have to pay it off before 24th August ; if I wait until statement hits the doormat I will be too late and will incur interest charges.

wendym

It was an introductory offer of 9 months interest free on purchases and balance transfers (I didn't transfer anything to the card).

jonesMUFCforever

How did you clear the balance?
Did you leave it until last minute and then pay by cheque? - This may appear as paid on your statement within the interest free period but 'uncleared effects' may have meant that you did not.

wendym

I paid the the day statement arrived, by cheque, as I have done in the past on cards coming to the end of the interest-free period.

My statement shows it as payment received 2 weeks before the due date. Then on a zero balance it adds interest, dated a fortnight later.

Thanks for bothering with this - after my frustrating phone call I really just want to get to grips with it.

jonnyb

wendy, as ejones says you need to confirm the exact date that the 0% ends.

the only logical explanation for your situation is that the 0% ended before you settled the final balance, so they charged you interest on the whole balance for that period.

there are very few, if any, cards where the 0% ends at a time to coincide with a payment date.

Natwest website currently says 0% for 9 months from account opening.

King_Of_Fools

Yes, it would have been 9 months up to when you statement was printed. As you waited until you received the statement and then paid by cheque there would have been a number of days that interest was accruing, hence the £2.50 charge this month.

virgin_moneysaver

its 9 months from the date the account was opened not your 9th payment as your 1st payment would have been after a month if you know what I mean - I always ring the companies about 2 months before hand & ask for the specific date - also the NSPCC card statement gives 1 date for min payment or an 'if paying in full date' which is about 2 weeks earlier so a payment in full date is usually earlier than the statement date

exel1966

wendym wrote: »

My interest-free period on a NatWest card was due to end, so I paid off the balance (£400-odd) by the due date.

I now have a bill listing the payment in full, but charging £2.50 interest on a balance of zero. I have just wasted 10 minutes on the phone, and have decided to cut my losses and pay, to avoid incurring a late payment charge. I'll then cancel the card.

Just out of interest, can anyone guess what's going on? A mistake by them, a try-on, or a brilliant stroke of Kafa-esque accounting?

Not a mistake by them i'm afraid. This question appears in this forum a few times every month because the credit card companies do not make it clear exactly when the 0% period ends. Having said that the cardholder has to share some responsability here and should always check the exact date. I would like to see c/card statements with the period printed on the statement, but that of course would lose the card companies money.

Some 0% offers will commence from the card opening date, some from the actual transfer date (not in this case though) and some from the first purchase date.
It would appear you have just exceeded the free period. Fortunatley, it's not been too costly for you, but will serve as a gentle reminder for next time.

wendym

As a long-term credit card tart, I have clearly just been lucky up to now.

Thanks to you all - my thanks button is playing up again.