Caught out by Residual Interest!

iAMaLONDONER

Chris2000 wrote: »

Halifax Clarity card charged me residual interest on a cash advance last year.

After paying the balance in full, which included an overseas cash advance, they charged 99p interest the next month.

After paying the 99p by direct debit they charged a further 1p interest the next month.

After paying the 1p by direct debit, the residual interest stopped.

I can understand why some card providers would program their computers to waive small amounts of residual interest especially if there are no other transactions in the month. A paper bill and a direct debit to collect 1p!

I hear Tesco & RBS write off sums due by DD under a £1.25 lol!

candybetje

Deleted_User wrote: »

All cards charge interest the same way - on the daily balance until paid off. It's only waived if you pay in full each month.

Yea h ..

Whiner

Vonnyd wrote: »

So foolishly I did not know that my Tesco CC applied residual interest and last month I paid off £613 of my £676 balance and this month found a tenners worth of interest.

I normally pay off the full balance but I made a mistake and now I'm paying for it! I had thought that interest accrued on the balance that you don't pay (and it would have applied to £56 and not the WHOLE balance and not accounting for the payment I made) but I was wrong. And I'm going to get stung on my next statement I'm told. I have paid the lot off now so it doesn't accrue further.

This is the first time it's happened to me and I'm not happy so I'm looking to find another credit card that doesn't charge RI. Does anyone know which ones will charge interest on unpaid balances rather than the whole lot?

Thanks all
Von

I think its absolutely hilarious when someone has a strum because they don't understand how the financial product they have signed up for works!

chattychappy

Whiner wrote: »

I think its absolutely hilarious when someone has a strum because they don't understand how the financial product they have signed up for works!

Do let us know when you make a mistake, so we can all have a good laugh!

ermine

Vonnyd wrote: »

I normally pay off the full balance but I made a mistake and now I'm paying for it! [...]

This is the first time it's happened to me and I'm not happy so I'm looking to find another credit card that doesn't charge RI. Does anyone know which ones will charge interest on unpaid balances rather than the whole lot?

Don't sweat the issue. Your time is worth more than ploughing through pages of Ts and Cs. The answer to this conundrum is simple

When discharging a balance where you know/suspect that interest has accrued, overpay by about £10 for balances up to £100 and I guess about 3% for anything over that (take a usurous 25% APR and divide by 12 to get the monthly APR of two and a bit)

It's no big deal to overpay on a card you use frequently. Yes the CC company gets free use of some money until you've made purchases to eat up the difference but then you get enough free use of their money.

Now if you can't overpay this small amount then you have a different class of problem, which is living above your means, but if it's being stiffed for itty bits of interest that is really bothering you then that's the solution.

It's been a while, but if I ever see interest on a card statement I immediately overpay the card for the amount and anything I think I have spent since the statement, switch to using another, and that means the modest interest on the next statement is the end of it. I chalk that in the same class of thing as a library fine - it's a kick-back from the world for not paying attention. You've acknowledged you made a mistake. Take responsibility for your actions and move on...