Paying off credit card balance

senorita76 · 1 February 2014 at 9:44AM

Hello there, six years ago my husband signed up to a citibank credit card, which was handed to him on a plate and we never really checked the terms or conditions! It turns out our interest is 24% Apr. We have been paying it off faithfully for years, but as you can guess the balance is far from going down.
We will be getting a bonus at the end of the summer, which we'd like to use to halve the credit card balance. My question is, if you pay off a lump sum, does the credit card provider subtract the whole amount from the balance or do they include interest too. Ie if the balance is 6k and I paid off 3k, would the 3k come straight off the balance as a whole, so that only 3k is left to pay. Sorry if this seems like a silly question! Many thanks

CherlokHomes · 1 February 2014 at 10:00AM

senorita76 wrote: »

Hello there, six years ago my husband signed up to a citibank credit card, which was handed to him on a plate and we never really checked the terms or conditions! It turns out our interest is 24% Apr. We have been paying it off faithfully for years, but as you can guess the balance is far from going down.
We will be getting a bonus at the end of the summer, which we'd like to use to halve the credit card balance. My question is, if you pay off a lump sum, does the credit card provider subtract the whole amount from the balance or do they include interest too. Ie if the balance is 6k and I paid off 3k, would the 3k come straight off the balance as a whole, so that only 3k is left to pay. Sorry if this seems like a silly question! Many thanks

Why not just a apply for a 0% balance transfer card and transfer the balance across and rip the citi card up.

senorita76 · 1 February 2014 at 10:04AM

Thanks for reply. Here where I am in Spain, 0% interest cards do not exist. Spain is not competitive at all with credit cards and transferring balances is not an option. This would have been my first port of call, otherwise. Sorry I should have mentioned that. We are not in a position to get a loan with a lower rate of interest either, so the only option really it to pay it off and fast!

molerat · 1 February 2014 at 10:22AM

Interest is added monthly so the balance increases monthly then is reduced by any payments. Paying a lump sum will reduce the balance at that time and monthly interest will then be added to the reduced balance going forward.