Credit Card Interest Query

gemz700

Hi,

I received my credit card statement today and thought the interest looked a little high.

I normally pay my credit card balance in full every month but last month i left £150 odd on there. I was charged £6 interest.

When i phoned up i was told that if you dont pay the credit card off in FULL then the interest charged is on the entire balance at the time of the statement and it doesnt take in to account any payments made.

Is this correct and is this the same with all credit cards?

RTNI

gemz700 wrote: »

Hi,

I received my credit card statement today and thought the interest looked a little high.

I normally pay my credit card balance in full every month but last month i left £150 odd on there. I was charged £6 interest.

When i phoned up i was told that if you dont pay the credit card off in FULL then the interest charged is on the entire balance at the time of the statement and it doesnt take in to account any payments made.

Is this correct and is this the same with all credit cards?

This is correct. If you fail to clear the full balance, then interest will be charged on the full balance, not the "remaining" balance that you did not pay off. Standard within the CC industry to do this.

gemz700

God how cheeky is that. I was starting to think it was just MBNA and i was gonna cancel....how can they charge you on money you have paid off?!

gemz700

another thing....

If this is the case you may be interested in hearing about the new Argos mastercard. Can be used anywhere u see the mastercard sign and they are offering 3 months interest free and this is not an introductory offer. Interest after is 17.9%

thumshie

gemz700 wrote: »

how can they charge you on money you have paid off?!

I may be wrong, but what they're actually charging you is for the days between you making the purchase, and the payment being made(Which could be 50+ days), i.e. you don't get an interest free period.

You may find that interest will be applied to next months bill. Not sure about MBNA, but some card providers remove the interest free period until you've made a full repayment, i.e. two billing cycles..

tom188

Card companies charge you interest from the date you make your purchase until the day you pay it off.

Most firms will waive the interest charged if you pay off the entire balance (creating the interest free period). However if you do not they charge the interest accumulated during the period the balance is on the card.