Help me understand how interest works, please?

[Deleted User]

Ok well I hope someone can help me, it's a really easy question, but I just don't know the answer.

I have a santander 0 credit card, I spent 250.00 the month before last and didn't pay it off, so I paid it off on the 1st November.

My balance is now 0, if I spend today and repay on the next statement will I pay interest on todays spend?

YorkshireBoy

Long answer:

If you don't clear your statement balance by it's respective payment due date you'll pay interest until you've paid the next two statements in full by their respective payment due dates.


Short answer:

Yes.

[Deleted User]

I don't want to pay interest, so what is the best thing to do?

Wait and not use the card for two statements?

YorkshireBoy

If you overpay slightly (work out the interest to be applied on your next statement) - in order to create a small positive balance on your next statement - you won't have to wait a second month because there won't be any residual interest to be applied.

chattychappy

YorkshireBoy wrote: »

you won't have to wait a second month because there won't be any residual interest to be applied.

But are you sure the OP would pay interest on the new spend? Whilst there would indeed be some residual interest still to come, I don't think there would be interest on the new spend if the statement on which it appears is paid in full.

YorkshireBoy

chattychappy wrote: »

But are you sure the OP would pay interest on the new spend? Whilst there would indeed be some residual interest still to come, I don't think there would be interest on the new spend if the statement on which it appears is paid in full.

I think they're carrying an interest bearing balance now?

OP suggested waiting two statement periods. I suggested they'll have a shorter wait if they clear the balance plus residual interest to be applied to 'reset the clock'.

Perhaps OP should post up some transaction values/dates etc and that would help?

Joshua_Wilson

As far as I know, If you overpay slightly just to create a positive balance on your next statement there won't be any residual interest to be applied so you won't wait a second month for it...