Silly Interest Question

Miss_Marple_2

I'm sure this question has ben asked many times before, but I wonder if someone could help me regarding interest on my credit card - I know I'm being a bit slow, but can't quite get my head round things.

I have had the card a few years, but for the last year or so, I have not been using it, just reducing the balance by paying around double the minimum payment each month.

Last month I was in a position to pay the full balance, which I did ( £643). This month, the balance is just interest of £2.02. I wonder what prompted the interest given that I paid the balance in full. I am going through the mortgage process at the moment and will need to show that I have zero balance on my credit cards.


I have paid the £2.02, and I am not quibbling that it is owed, but wondered how you get a balance to zero. Will my payment of £2.02 be the end ? I have another card that I have done the same on (but not had the statement for yet) and would just like to be sure that I can get the balance to be zero.

Cycrow

interest is accured daily then added on at your statement each month

if you pay it off straight away, then no more interest should be added.

YorkshireBoy

The £2.02 was the interest which accrued from your statement date to the date you made your £643 payment.

The interest, called 'residual' or 'trailing' interest, will stop after you've paid two consecutive statement balances in full...which you have done now.

StuC75

Because the statement is only interest free when the balance is paid in full for consecutive months..

In this case the interest you were charged was the trailing interest from the last statement date upto when the payment was received..

bengal-stripe

Miss_Marple wrote: »

Last month I was in a position to pay the full balance, which I did ( £643). This month, the balance is just interest of £2.02. I wonder what prompted the interest given that I paid the balance in full.

Interest is worked out (and charged) up to the day your statement got compiled. Your payment arrived, let's say, 10 days after the statement date. For these 10 days you are charged ('trailing' or 'residual') interest.

Only if the full balance has been paid for two consecutive months, no further interest will be charged.

Miss_Marple_2

Thanks everyone - you've put my mind at rest - I had visions of my balance being set to decreasingly smaller amounts forever !