balance increase without any expenditure

bloobelle

The answer to that is yes, though I still don't get how there can be no reduction in my overall amount owed. How can the amount that you owe increase when you haven't spent anything at all?

YorkshireBoy

bloobelle wrote: »

The answer to that is yes, though I still don't get how there can be no reduction in my overall amount owed. How can the amount that you owe increase when you haven't spent anything at all?

Because the statemented balance continues to accrue interest until your payment credits the account.

That's why it was suggested earlier to pay sooner.

Most cards are 1% plus interest. On a 15.9% APR card your monthly interest is around 1.3%.

It therefore follows that there will be around 1.3% interest* added on your next statement, yet you've only paid 1% off the balance.

The net result is you owe 0.3% more than you did last month.

Clear?


* It'll be a little less than this as there are around 5-10 days between your payment due date and the next statement date.

opinions4u

bloobelle wrote: »

The answer to that is yes, though I still don't get how there can be no reduction in my overall amount owed. How can the amount that you owe increase when you haven't spent anything at all?

An example:

Balance: £1,000
Minimum payment: 2%
Interest charge: 2.2% a month

(This isn't possible with cards issued more recently)

There are other quirks where a billing period may exceed a calendar month, depending on when bank holidays and weekends fall. So interest calculated daily is higher than an "average" month.

Paying close to the due date is also an invitation to accrue interest of interest.

bloobelle

Thank you for the explanations. I think I more or less get it. Are you saying there is nothing amiss here and that this is just standard practice?