Clubcard Credit Card - estimated vs actual interest

YorkshireBoy

Rochdale_Pioneers wrote: »

you go off the non-caveated number on the front of the bill.

It's been a while since I last had a Tesco credit card, but most/all of my other card statements would say, on the front page summary, something along the following lines of...

Estimated interest* £16.67

You'd then turn the page, looking for the "caveat"...

* The estimated interest figure is based on us receiving the minimum payment on the due date and assumes you make no further transactions on the account.

Of course estimated interest is also explained in the T&Cs, but perhaps not as easy to find?

YorkshireBoy

Rochdale_Pioneers wrote: »

So I take it that regardless of the whys and wherefores of the interest charged on the 1 week late clearance in full of the last balance I take it that they're not charging me interest on this month's statement?

Interest is always charged on purchases from the date they're posted to your account. As a concession, they waive this interest (that accrues in the background) if you pay your bill on time and in full.

Since you're now carrying a revolving interest-bearing balance, you will continue to incur residual interest charges until you either...

1. Pay two consecutive statements in full by their respective payment due dates, or

2. Overpay to create a small positive balance, and then wait for a zero balance statement before starting to make purchases again.

Does make me wonder how I managed with thousands of outstanding balances when I was younger - sure interest charges were in line with estimates....

Maybe you weren't spending on them?...ie they were BT cards?

Rochdale_Pioneers

For clarity - on the 1st statement in question I paid the minimum then a week later paid the entire statement value (in error) - an overpayment of the statement value. I have continued using the card throughout so having overpaid the 2st statement I now will clear the 2nd statement in full by the due date. Rereading the back of the statement it suggests that interest charges stop on the date the balance is cleared, with that interest charged the following month
I assume this is the residue interest I get charged on the next statement?

Rochdale_Pioneers

YorkshireBoy wrote: »

It's been a while since I last had a Tesco credit card, but most/all of my other card statements would say, on the front page summary, something along the following lines of...

Estimated interest* £16.67

You'd then turn the page, looking for the "caveat"...

* The estimated interest figure is based on us receiving the minimum payment on the due date and assumes you make no further transactions on the account.

Of course estimated interest is also explained in the T&Cs, but perhaps not as easy to find?

Sadly there is no caveat. Tesco rep I had on the phone agreed its not explicit how they calculate the estimate.

Gromitt

Rochdale_Pioneers wrote: »

Didn't expect it to be spot on. Just not out by 100%

It wasn't out by 100%, the interest was £26 because you continued to spend on the card. The additional £6 you could have avoided by overpaying the balance and putting a small credit on the account (and is a moot point anyway as its a separate statement, Tesco can't be expected to predict the future).

If your transactions were 30 days old and your interest rate was 21.9%, then I'd expect interest to be approximately £16.

Rochdale_Pioneers

Quick update. Tesco are refunding the difference between interest charged and the estimated interest, accepting that the Estimated Interest figure on the front of bills is misleading. So it does pay to argue the toss....

And yes, if we ever need to pay late in future we'll understand it a little better.