I dont understand...

YoungBaker

A bit annoyed... maybe I am missing something fundamental here with the whole use of a credit car but please clear up:

I have a vanquis credit card, used it for some things over Christmas and paid off in full in December. I called up in Jan asking to close the account and was told it still had £1.01 carried over from interest even though I cleared the account so I had to pay this to get the account closed come my next statement.

I paid the £1.01 and have waited for my statement. In it comes today - my balance is £1.01.

Apparently, I have somehow accrued £1.01 interest on my previous balance of £1 I had already paid... So how the hell do you ever get a clear balance then? Surely if every time I pay the £1.01 to get to £0 then next month their gonna have just bumped another quid on in interest?

Am i missing something obvious here?

jonesMUFCforever

You have to clear the balance for 2 successive months.

grumbler

jonesMUFCforever wrote: »

You have to clear the balance for 2 successive months.

I think this is needed to avoid paying interest on purchases. And I don't see how this can explain why the interest on such small balance (that isn't purchase) is £1.01.

SnowTiger

grumbler wrote: »

I think this is needed to avoid paying interest on purchases. And I don't see how this can explain why the interest on such small balance (that isn't purchase) is £1.01.

Hidden deep within the depths of Vanquis' T&C's:

If in any statement period you incur interest (excluding any Repayment Option Plan transaction charge) and that interest is less than £1, a minimum finance charge of £1 will be added to your account in place of that interest which will be waived.

So, that's 1p + £1 minimum finance charge.

YorkshireBoy

SnowTiger wrote: »

So, that's 1p + £1 minimum finance charge.

Your Vanquis quote says the £1 charge is in place of the interest (of 1p) which will be waived.

So that's just £1 isn't it?...like it would be if the interest was 34p, 76p, etc?

chris-j

Are you sure they did not get it wrong and in fact your account is showing the £1.01 you paid to close the account which in fact you did not owe, so they actually owe you this.

SnowTiger

YorkshireBoy wrote: »

Your Vanquis quote says the £1 charge is in place of the interest (of 1p) which will be waived.

So that's just £1 isn't it?...like it would be if the interest was 34p, 76p, etc?

My reasoning: there was a penny outstanding. Interest on a penny would have been less than £1, therefore £1 minimum finance charge applied.

YoungBaker

SnowTiger wrote: »

My reasoning: there was a penny outstanding. Interest on a penny would have been less than £1, therefore £1 minimum finance charge applied.

I understand but then isnt this going to keep happening? So it doesnt matter if I keep clearing it, they will keep saying oh there was a penny interest, but because the minimum finance it will be £1.01.

Gonna call them tomorrow anyway

grumbler

Just pay £2.02 to cover the next £1.01 charge?

SnowTiger

al_1232 wrote: »

I understand but then isnt this going to keep happening? So it doesnt matter if I keep clearing it, they will keep saying oh there was a penny interest, but because the minimum finance it will be £1.01.

Gonna call them tomorrow anyway

The general rule is that you need to clear your balance in full for two consecrative months to stop interest being applied.

grumbler

SnowTiger wrote: »

The general rule is that you need to clear your balance in full for two consecrative months to stop interest being applied.

I think this doesn't apply in this case. It's not purchases and the interest is added on the small balance for the time after the statement and before the payment. I think the trick is to pay extra in advance to make the statement balance £0.