How on Earth do I calculate the interest?

supersavy

Hi

Sorry if this question has been asked before as I am new here but I was wondering if anyone could help?

I have a credit card that charges 1.385% interest per month on purchases. On 6 June I got a statement for £1644.11 to be paid by 1 July - I paid £1200 on 29 June and then the other £444.11 on 3 July. I got my new statement on 6 July and they have charged £41.89 interest - does this sound about right?

Sorry but I am terrible at maths and wondered if there was anyone else out there who was a maths wizz that could help

Cheers

Bokkens

Some of the interest may have been from the pervious statement date unless you paid you bill in full.Also you were late paying the full amount as £444.11 arrived after the requested payment date so there will be two days interest added and possibly a late fee also.
I would have though a interest charge of approximately £1.60 for the two days,but the other charges may apply.
Get on the phone to customer services and ask them kindly to explain it to you and to check it with you write down the figures as they explain it to you and if you don't understand or are unhappy ask them to keep explaining it or request to speak to the customer service manager .
If they have made a mistake ask that the interest be removed from your statement.
If you can get online and check your statements there as it gives you a lot more time to plan payments and your budget rather than wait for a statement to arrive and have a week to make the payments.
Hope that helps a little.

supersavy

Thanks Bokkens, I have sat here all morning trying to work the bloomin thing out :mad:

I rang then and they said they charge an average daily rate based on a 30 day month. They charge 1.385% per month so that works out at 0.04616 per day.

We paid £1629.43 for a car to be mended on 5 May (which was listed on our 6 June statement) and then another charge of £14.68 was added for something else on 5 May also. I then paid £1200 on 29 June (from our 6 June statement) and then other other £444.11 on 3 July (just two days after the due date) this was due to having the shuffle money from my husbands stupidy book savings account. I don't often leave it that late but we were away on holiday for two weeks of June so it blew my chances of sorting out the statment.

I don't often have to pay interest so wasn't sure if this seemed right or not and no matter how much I try to work it out i get in a pickle.

Hasten to say I now hate credit card companies and my husbands car that cost so much to mend :rolleyes:

Bokkens

I would still get on to customer services and speak to the manager and tall nicely to him and explain briefly the money was late butit has not happened before and you have been a customer for ages etc and ask for a refund if he won't ask to be put throught to customer retention and plead with them for a refund.While you are there ask for a 0% deal on your card (if it is a credit card) for 9months if and when they offer 1.2 at 3months it is better than what you had befor take it all out and put in a saving account for three months then return it unsued hopefully you will make enough to cover any possible charges.
If you don't ask they will not give it to you and the more you ask the more often you get it,you have to be polite ,clam and cheeky.
it has always workrd for me.

supersavy

cheers Al Mac but I didn't pay the £1200 late - that was a few days early so that is why I was shocked at the amount of interest :-(

Thanks bokkens - i should give that a go, my motto is if you don't ask you don't get so it is always worth asking :-) Not sure they will let me speak to them as I am the second named card holder even though I pay the bloomin thing. Thanks for all your advice anyway it is really appreciated.

Milarky

I have a credit card that charges 1.385% interest per month on purchases. On 6 June I got a statement for £1644.11 to be paid by 1 July - I paid £1200 on 29 June and then the other £444.11 on 3 July. I got my new statement on 6 July and they have charged £41.89 interest - does this sound about right?

You paid £1200, late, so you will be charged interest on the whole balance, plus a late payment fee.

A late payment fee is a possibility since 29 June was a Friday, 1 July a Sunday - so your payment of £1200 (unless it was direct debit) will have arrived around 3 July and your payment of £444.11 on 5 July.

Assuming there was a £12 late payment fee (was there?) the interest may be £29.89

Interest between 6 June and 6 July - based on dates of payments - will be £20.62 [£1644.11 for 27 days until 3 Jul - then £444.11 for 2 days - times 12/365 - times 1.385%] That leaves £9.27 for the period up until the 6 June. Working backwards that averages about 12-13 days - meaning if you purchased one item 12-13 days before 6 June and that cost exactly £1644.11. In practice I'm assuming you purchased more than one item (on different days) to give that total. But since it works out at about 'mid month' this looks about right too.

Which bank's card is this? Please note that the interest won't now go away until you have a cleared balance again. If you continue to spend on the card before clearing this balance you will be charged interest (i.e. spending on a carried forward balance) BUT it could be more severe still. Several cards (I can think of RBS/Tesco/Mint and Halifax/BOS and Capital One but there may be others too) ALSO say that you must have cleared the previous month's statement (in your example that would be in May) as well as the most recent (ie June) BEFORE you can safely use it in the current month (ie July) without being charged interest automatically.

This, I'm afraid, is where credit card companies rub their hands - customers carrying a revolving balance are charged interest on EVERYTHING until they at least clear the balance entirely and (now also with certain card issuers) leave that card unused for a whole month thereafter. It's a bear trap I'm afraid.

If you let use know the Issuer of the card, then we can suggest the quickest way back to avoid future charges because we can check the terms and conditions. In the meantime, seriously consider a direct debit (at least for the minimum amount - preferably the full amount) as this will avoid charges and/or interest.

Bokkens

Get your partner to phone up he /she gives permission to share the data on the account you then take over and get what you want out of them.job's a good un!

thumshie

This sounds about right, without any late fee's or charges. As others have said if you bill is not paid off in full by the due date they remove the 'interest free period' and start charging interest from the transaction date.

You've been charged 55 days interest(from 5th May 29th June) on £1200, thats £30.46 at your interest rate.
You've also been charged 56 days interest(5th May 30th June -new statement generated??) on the £444.11 £11.48, making a total charge of £41.94 by my maths..

As others have pointed out you'll still get charged interest on your next bill...

supersavy

My goodness you lot are good - thanks for all your maths help that is fab! I never knew about the sharing data thing either - that is great as I am a bit more forward than my hubby so am more likely to complain than he is.

Nope sorry Al Mac you got me wrong, what I meant by 'I paid £1200 on 29 June' was that that was the date it showed on my statement so I actually paid before that and it hovered in the etha for a while as it does and then arrived on my statment on that date. The same with my second payment too.

It was a Tesco card which I was using.

Angeldelight_4

Hi Supersavy,

I'm not sure if yo've got all the answers you want now but I'll add my bit anyway!

basically, by not paying the full balance you forfeit the right to an interest-free period on all of the purchases showing on the statement PLUS the transactions that are charged on to the account up until the date full payment IS eventually received.

So interest is charged on a daily basis from the date the purchases hit your account until the first payment is received, then it adjusts and charges interest on the difference and any new transactions until the full payment is received.

The following month you will have residual interest as well so you can expect another £10 or £15 pounds or so on your next statement unfortunately.

Is it the first time you've been charged or asked for a refund?? Providing it is, Tesco's aren't normally too bad on the refunds policy so if you call and ask you might get lucky.

Good luck!

supersavy

Thanks for that info Angeldelight, blimey I will certainly be cancelling the card if they charge me any more interest considering I paid the bulk of the amount off before the date required and then the rest 2 days later!

Oooohhhh I am really starting to hate credit cards! The thing is I could really kick myself as I have a 0% creditcard which I could have used but thought I could get some points and pay in time but what with hubbies stupidy book account and having to go into branches etc I missed the date - my own fault I know