Halifax card paid off - still charged interest

ericpode

I though that if you cleared the balance of your credit card before the due-by date then no interest would be added.

My partner finally manged to pay off her Halifax card last month in good time. The new statement arrived today which has the date of the payment received as 6 days before the old statement due date - but the new statement says:

Previous balance: 72.36
Payments & credits received: 72.36
New transactions and credits: 1.00
Next month's estimated interest: 0.02
Minimum amount due: 1.00

so she's been charged 1.00 interest even though she cleared the balance. Presumably if she now pays this 1.00 she'll be charged interest of 2p next month!

I would have advised her to ring up to complain but it will probably cost more than a pound to make the call.

I always pay my card off in full in good time and are never charged interest.

Do Halifax have something in their terms which allow them to charge interest even when the balance is cleared?

StuC75

As you say that "My partner finally manged to pay off her Halifax card last month in good time."

implies that this balance had been running over for a while? The interest isonly waived where the balance is constantly cleared each month (e.g. in your case the balance was from previous months - so doesnt benefit because of the trailing interest across the months)..

jd87

It is interest on spending from the previous month that was incurred between the time the previous statement was raised and the previous payment was made, because the previous statement wasn't paid in full

If you pay the £1 now then there won't be any interest next month. The £0.02 must be an error. You don't pay interest on top of interest.

cornish164

I've just had the same problem with virgin I paid the total balance showing on my statement well before the due date but now they say I owe another £141.00 in interest! Haven't used my card in years arguesd with them saying I've paid in the full the amount showing on the statment but they won't have and yet my Barclaycard has been cleared in the same way and they haven't stung me for any interest!!

sistafromanothermista

jd87 wrote: »

It is interest on spending from the previous month that was incurred between the time the previous statement was raised and the previous payment was made, because the previous statement wasn't paid in full

If you pay the £1 now then there won't be any interest next month. The £0.02 must be an error. You don't pay interest on top of interest.

What they said......
I had a similar thing and when i called Virgin this is exactly how they explained it which makes sense..

ericpode

Thanks. I'll tell her to pay it immediately - then hopefully there won't be a daft statement for 2p next month.

sistafromanothermista

I had statements for nearly 2 years as i was 1p in credit:wall:
I must have asked Halifax a squillion times to close the account!
What a waste of paper!

[Deleted User]

sistafromanothermista wrote: »

I had statements for nearly 2 years as i was 1p in credit:wall:
I must have asked Halifax a squillion times to close the account!
What a waste of paper!

Ask them to send you the 1p or write it off. They can't close the account otherwise.

sistafromanothermista

I did, numerous times.....in the end they sent me a cheque :rotfl:

fozmcfc

As others have said, there is always interest between the statement date and when the money hits the account to pay it off, unless the previous statement balance was completely paid off.

As for small balances, some cards have a minimum of £1 interest, so even if 2p interest is incurred, £1 will be the minimum added in interest.

Years ago, I had a really small debit amount on my Natwest card about 14p and they just put small balance auto cleared, or something similar and I didn't have to pay it. Not sure if they would do the same now, or if £1 would be charged.

Gromitt

jd87 wrote: »

If you pay the £1 now then there won't be any interest next month. The £0.02 must be an error. You don't pay interest on top of interest.

I'd guess that the £0.02 is the amount of interest expected if you didn't manage to pay off the entire £1 in full. You'd also get a £12 fee as well though for not making the minimum payment.

I remember rolling interest a few years ago and finally managed to pay the bill in full, but knowing further interest would be calculated, I paid more than the due amount. I ended up being able 8p in credit for about 2 years before they sent me a cheque for the 8p, saying my account was closed due to lack of use.