Question re interest

Madison

My current statement total is £320 but I returned an item for £70 which was credited after the statement date so the current balance is £250 which I intend to pay in full by the due date. I assumed I wouldn't pay interest on the £70 but a friend told me I would as it wasn't inclluded in the original statement balance and I need to pay £320, thus ending up £70 in credit, to avoid it. Is this true?:eek:

[Deleted User]

Most lenders don't count refunds as payments so your friend is probably right.

thenudeone

It's worth checking with the card issuer, though.

molerat

Speak to your card provider. I pay in full by DD and Cap1 will automatically reduce the DD payment in those circumstances.

jojo57_2

Your friend is right.A refund is not classed as a payment so if you only paid the £250 you would be charged interest. Well thats how most credit cards work but it might be worth while checking with your specific provider

bris

Not if the £70 is in the account before the payment date, so if the balance is only £250 now thats all you need to pay.

Madison

Statement date is 20th September and the payment due date if 9th October so, presumably, if I don't purchase anything before then and the £250 payment has cleared, then my balance will be £0.00 - surely they couldn't charge interest on that!

[Deleted User]

OP - you need to check. Many people have posted on here about assuming a refund would count as their minimum payment, and then getting a late payment fee as a result. Not all lenders treat refunds as any part kind of payment.

So either check, or play safe and pay the £320.

chris-j

it might not count as payment but if you know the credit has been made before the due date you only need to pay £250 to reduce balance to 0. Interest is calculated based on balance at due date, if you pay £320 then at due date your balance will be in credit by £70.

Madison

Thanks for all the advice - I'll take a chance and pay £250 at the end of this month and bump this post, with the outcome, when my next statement is available in October.

Gerson2k

Madison wrote: »

Thanks for all the advice - I'll take a chance and pay £250 at the end of this month and bump this post, with the outcome, when my next statement is available in October.

IMHO if you're not sure (or not even going to confirm with your CC) then it would be prudent to make the £320 payment, because if you get it wrong you will be left with interest on applying on the whole £320 and also trailing interest the month afterwards - you should be able to work out how much interest will be on £320 from your APR.