Interest free period

geekonthepc

Hi all

OK, here's a tedious question that I'm trying to get my head round. Now just to be clear I never have paid interest on my card as yet and don't intend to - this has just been on my mind. Scenario is as follows:

Let's say I put £200 on my credit card on the 10th July from a clean balance sheet. Statement comes through on the 20th July saying I owe £200. Fair dos.

The payment is due on the 10th August (these dates are hypothetical!). I only pay the minimum payment (let's say £10) so the remainder I owe is £190 and that stays on my card.

I then pay the remaining £190 on 15th August and wait for my next statement.

My question is - does my 52 days interest free period start as soon as I've cleared my balance, or do I have to wait until I get a £0 statement? I know obviously I'd be hit with interest from the remaining balance that would show up on the next statement. As soon as I've paid the statement with just interest, bringing the amount I owe to zero, does the interest free period start again?

The reason I ask is this - if I pay an outstanding balance that's been sitting for a while, bringing the balance to £0, and then make a purchase for £20 - will I immediately be charged interest on the £20? (because I hadn't got a £0 statement yet).

Hope that makes sense to someone, I know it might be confusing. Just trying to work out the logic. In essence, do you have to receive a clean statement before any interest free grace period starts working again?

grumbler

If you have not paid your previous statement balance in full, there will be no any interest-free period for your purchases in the next billing month.

I don't remember the reasoning behind this, but IIRC you have to pay two consecutive statements in full to start getting interest-free period on purchases again.

guesswho2000

grumbler wrote: »

I don't remember the reasoning behind this, but IIRC you have to pay two consecutive statements in full to start getting interest-free period on purchases again.

Correct. Reason being, you get the interest waived on purchases if the entire balance is cleared each month. If not, interest is charged from date of purchase to date cleared, so if you clear it in month two, month three will contain trailing interest from the date of statement one to the date during the second statement period on which the payment is cleared.

geekonthepc

Thanks, that clears it up for me. Two statements in full - gotcha!

Claree__x

Sorry to hi-jack but similar question - might even be the same question but I just want to get my head around it.

Balance £0, spend £200 on 1st July.
Statement on 10th July says £200 owed, due 1st August.

If I continue spending on the card but pay £200 by the 1st August, does that count as a payment in full, even though by 1st August there may be more spending on the card that hasn't been statemented yet? Or would the further spending on the card incur interest?

grumbler

Claree__x wrote: »

If I continue spending on the card but pay £200 by the 1st August, does that count as a payment in full, even though by 1st August there may be more spending on the card that hasn't been statemented yet?

Yes, it does