Tesco Credit Card - interest payments?

Zingarakj

We use our Tesco Credit Card for all our purchases to get points and then pay our bill off in full. We pay the minimum payment by direct debit and then pay the remainder manually. The month before last I paid on the due date, but for some reason my bank didn't pay it in the normal faster payment 2 hours, but for the next day. So, the money was paid one day late. On the next statement we were charged about £30 interest just for this one day (on the statement it quoted £19.84 if not paid off in full). My dh has rung them to check it is correct and apparently it is as it's based on an average balance, and to top it all off we will have another £10 to pay on the next statement!! The statement balance was £1,233, and obviously there was more on there for the days since the statement, but it seems an awful lot of interest for 1 day!! The statement is not very clear about the charge, it says 1.313% monthly interest on £1,548.81 = £31.73??

Anyway, I'm not sure if they have changed terms and conditions recently, or whether they have always been like this, and whether all credit cards are like this? My dh told them we would be terminating our account with them. I see from other posts that people aren't sympathetic when people get charged by credit cards, but on this experience the credit card company seems to be intentionally unclear about how it calculates charges, and I dread to think what someone would be charged if they paid it off a week late, or whether it would be the same charge? And I can see how people can easily escalate debt!

Now, as a comparison, our Halifax current account has a high interest charge of £1 per day for any amount overdrawn up to our limit, which for being £1 overdrawn is a huge amount. But, it is very clear what the charge is, £1 per day for every day overdrawn.

If all credit cards are like the Tesco one we will need to re-think our use of them, as it's certainly not worth collecting 1 point for every £4 spent, if there is a slight chance we might unintentionally pay late? And with 2 small children, there are always a lot of other distractions!

YorkshireBoy

Zingarakj wrote: »

If all credit cards are like the Tesco one

They are.

With all credit cards you incur interest from day one on purchases. As a concession, they waive this interest if you pay in full by the due date. So, as you now realise, it isn't one day's interest but nearly a month's worth.

if there is a slight chance we might unintentionally pay late? And with 2 small children, there are always a lot of other distractions!

I'm sorry, I don't buy that argument (and nor do the credit card providers). They've given you almost a month to make the payment. What do you want?...another few days?...a week?...more?

Zingarakj

YorkshireBoy wrote: »

They are.

With all credit cards you incur interest from day one on purchases. As a concession, they waive this interest if you pay in full by the due date. So, as you now realise, it isn't one day's interest but nearly a month's worth.I'm sorry, I don't buy that argument (and nor do the credit card providers). They've given you almost a month to make the payment. What do you want?...another few days?...a week?...more?

Thank you for your comments about the interest on the whole amount since purchase.

However, I wasn't arguing that the credit card companies shouldn't charge me for being a day late paying, I was saying that with the slight chance I could be late paying, I need to look at whether I should change my credit card use! Are you intentionally trying to be antagonistic? Or did you just misread? Apologies if you just misread, but I have noticed on this thread people seem to like treating people like they're fools for falling foul of the credit card company rules, which they deliberately don't make clear! Most people ask questions because they would like answers, not for someone to have a go!!

bengal-stripe

Zingarakj wrote: »

The month before last I paid on the due date, but for some reason my bank didn't pay it in the normal faster payment 2 hours, but for the next day. So, the money was paid one day late.

Usually Faster Payments arrive within a couple of hours (or less), but the payment can (and is allowed) to take up to the end of the next working day. So send the payment one business day earlier than the 'due date' and you are covered for the eventuality of a delayed arrival.

Zingarakj wrote: »

My dh told them we would be terminating our account with them.

Dumb thing to do, all guns blazing is never a good approach. If he had phoned apologetically and asked nicely, the CC might have scrapped the interest due. It would have been worth a try.

Now you'll have to stick to your guns and close the account.

no1catman

As I understand it - you DD for the Min., then pay the rest later - intending to do that before the due date!?
But if you are intending to pay it all - with no c/fwd - then why not pay at all by DD? You could arrange the date so that it is not too soon after getting the statement but still in plenty of time for the Credit Card to get the automatic payment? That way - you don't have to worry, only know that enough is in the current a/c at the due date!

grumbler

Zingarakj wrote: »

Anyway, I'm not sure if they have changed terms and conditions recently, or whether they have always been like this, and whether all credit cards are like this? My dh told them we would be terminating our account with them.

All CCs are the same. If you fail to pay the balance in full and on time you lose interest-free period on purchases for this month and the next month:

Interest Free Period - Maximum 51 days for purchases if you pay your balance in full and on time, and have paid the previous month’s balance in full and on time.

It makes sense to terminate the account only if you stop using any CCs.

If all credit cards are like the Tesco one we will need to re-think our use of them, as it's certainly not worth collecting 1 point for every £4 spent, if there is a slight chance we might unintentionally pay late? And with 2 small children, there are always a lot of other distractions!

Pay it in full by DD and you'll never be late. Or pay manually a few days earlier, not on the last day. As simple as that.

That said, there are much better options than getting 1 point for £4, e.g. pure cashback up to 3%.

YorkshireBoy

Zingarakj wrote: »

I have noticed on this thread people seem to like treating people like they're fools for falling foul of the credit card company rules, which they deliberately don't make clear!

You gave a very poor excuse for the possibility of paying late. It's highly unlikely that your two small children will distract you for a full month! Mine never did.

On the subject of clarity, if you check your T&Cs (or indeed the reverse of your statement), you'll see something along the lines of...

"Up to 56 days interest free on purchases, providing you pay in full by the due date and have paid the previous statement in full by it's due date"

It's hard to see how they could make this more clear?

Moving forwards, if you always pay in full (and never spend more than you KNOW you can repay next month) then a full payment DD would seem a good idea.

Otherwise, get a 0% on purchases card, set up a minimum payment DD, and then you only have to worry about making one manual payment on time at the end of the introductory period.

Zingarakj

bengal-stripe wrote: »

Usually Faster Payments arrive within a couple of hours (or less), but the payment can (and is allowed) to take up to the end of the next working day. So send the payment one business day earlier than the 'due date' and you are covered for the eventuality of a delayed arrival.



Dumb thing to do, all guns blazing is never a good approach. If he had phoned apologetically and asked nicely, the CC might have scrapped the interest due. It would have been worth a try.

Now you'll have to stick to your guns and close the account.

Good advice re the faster payments, thanks. He did phone and talk to them nicely, but they weren't budging on the interest. It was only then that he complained and said we wouldn't be using them any longer (or something like that) and they said they would pass it on. No doubt they are not concerned about losing out custom and wouldn't care one way or the other. I think we'll just use our Halifax credit cards from now on, as our current accounts are with them, so it's easier with just the one login to keep an eye on things.

Zingarakj

YorkshireBoy wrote: »

You gave a very poor excuse for the possibility of paying late. It's highly unlikely that your two small children will distract you for a full month! Mine never did.

On the subject of clarity, if you check your T&Cs (or indeed the reverse of your statement), you'll see something along the lines of...

"Up to 56 days interest free on purchases, providing you pay in full by the due date and have paid the previous statement in full by it's due date"

It's hard to see how they could make this more clear?

Moving forwards, if you always pay in full (and never spend more than you KNOW you can repay next month) then a full payment DD would seem a good idea.

Otherwise, get a 0% on purchases card, set up a minimum payment DD, and then you only have to worry about making one manual payment on time at the end of the introductory period.

It wasn't even an excuse for paying late, let alone a 'poor' one! And we didn't give any excuse to the credit card company, we just asked if the amount was correct and for an explanation! It was just a comment I made in my post saying that life can distract us from remembering things so we need to think about that and whether credit cards are best for us at the moment!!

Zingarakj

"If all credit cards are like the Tesco one we will need to re-think our use of them, as it's certainly not worth collecting 1 point for every £4 spent, if there is a slight chance we might unintentionally pay late? And with 2 small children, there are always a lot of other distractions!"

This was my comment in context, it wasn't an excuse!!

Thanks for all the helpful advise, I just wanted to know if all credit cards are they same, which it seems they are, and maybe someone else will learn from our mistake! If I continue to use credit cards for day to day spending, I'll have to be more disciplined with paying early or set up a direct debit. Or I might just use credit cards for internet purchases, as I don't like to use debit card on the internet, and debit card for day to day purchases.

bengal-stripe

Zingarakj wrote: »

It was just a comment I made in my post saying that life can distract us from remembering things so we need to think about that and whether credit cards are best for us at the moment!!

You can always set up the (additional) payment weeks in advance to leave your account at a specific date. Once the CC statement arrives, it will tell you the amount and the date due. At this point (when you see it all in print or on-line) you set up the transfer, which is to be taken 10 or 14 days later.

Now you have nothing to remember (apart from having sufficient funds in the account).