balance increase without any expenditure

bloobelle

I have a questions I wonder if anyone can help me with.

1. My recent CC statement shows that my balance has increased. This despite the fact that I have made no transactions, paid the minimum amount on time and incurred no other charges? Is this a mistake on the part of the CC Company or some form of creative accounting?

izools

It's likely to do with when in the month the bill was paid.

You'll pay less interest depending on how close to the date the bill was generated, so if you paid your May bill 20 days before the due date and your June bill one day before the due date your July bill may well include more interest than you'd paid the prior month, as the minimum is likely worked out as 1% of the balance + interest.

You should pay as soon as you possibly can in each billing cycle and pay more than the minimum to decrease the cost of the debt as much as possible.

~Beanie~

How has it increased? A statement usually shows the closing balance from the last statement, any transactions or interest and then the closing balance of this statement. Are you saying that the balance brought forward from the rpevious statement is incorrect?

izools

It sounds like their interest charge outweighed the prior months' minimum payment.

bloobelle

izools, - that's a great tip, thank you. I will definitely pay the bill when it comes in in future. Looking again at the bill it does indeed say that the interest outweighed the previous months payment, and by the amount of the balance increase. Is that legal? Seems unfair at least to offer a minimum payment that doesn't cover your interest.
Beanie - I think that answers your question too, it was the closing balance that had increased, not the previous one.

Wywth

bloobelle wrote: »

I have a questions I wonder if anyone can help me with.

1. My recent CC statement shows that my balance has increased. This despite the fact that I have made no transactions, paid the minimum amount on time and incurred no other charges? Is this a mistake on the part of the CC Company or some form of creative accounting?

If the credit card statement doesn't fully itemise how they get from an opening balance to a new balance, then I suggest you contact the credit card provider.

(but I've never seen such a credit card statement before)

StuC75

Was there any spending in the previous months? was there significant purchases on that month as transactions take time to be statemented and then interest bearing.. What is the mix of balances on the account (any Cash advances?)..

How close to the credit limit is the account? some accounts have £ X minimum payment or 3% of balance..

so really much depends on the %'s applied to the account..

Most statements also give a guide of what the interest would be on the next month? how does that compare?

This really is the downside of Paying only the minimum payment. Its just the minimum that they are obligated to ask you to pay.

bloobelle

I'm not spending on this card at all, no purchases, no cash advances, nothing else, so the only item shown was the interest, which was a little more than the previous months minimum payment. I have been paying the minimum payment for a while now without spending, and the balance has always decreased each month by around £5 - £8, so I don't entirely see how there can suddenly be no reduction but instead an increase in what I owe. I'm nowhere near my credit limit, I've used less than half of my available credit.
I do intend to phone the company, but thought I would ask here before hand to get some clarity, as figures are not my forte.

fozmcfc

Firstly let us know when you do find out.

If you haven't already, check that your APR hasn't been increased.

bloobelle

Will do. No I got the "your interest rate is changing (AND IT'S NOT GOING DOWN!) " letter today.

YorkshireBoy

bloobelle wrote: »

Looking again at the bill it does indeed say that the interest outweighed the previous months payment, and by the amount of the balance increase. Is that legal? Seems unfair at least to offer a minimum payment that doesn't cover your interest.

You need to understand that the only 'rule' these days is that the minimum payment should at least cover the interest already charged...not the interest that is due to be charged next month.

So, two questions:

How much interest was charged on your last statement?

And does that statement's minimum payment (due some 15-25 days later) at least cover that interest amount? (I'd be very surprised if the answer wasn't yes if you're not spending on the card)