Bit confused

djwolf

Just wondering if someone could explain this for me. I have a 0% credit card with MBNA. It's 0% on BT's until Feb '08. I do buy odd bits on the card and I know that they've been charging interest on my purchases since the initial 3 month period. I've always made sure I've paid off more than I've spent the previous month but they are still charging me interest (about £3-4 a month at present). How exactly does their interest charge work? Do you have to clear the total balance on the card to avoid any further interest? The balance is currently £1600 on the card.

Thanks.

YorkshireBoy

It sounds like you've fallen into the classic trap of spending on a card after you've done a BT to it.

Because your payments go towards the lower interest balance first (your 0% BT), you won't be able to stop the interest on your purchases until you clear the the entire balance on the card.

Thomas_Crown

djwolf wrote: »

Do you have to clear the total balance on the card to avoid any further interest? The balance is currently £1600 on the card.

Yes, you would have to pay off the whole balance in order to avoid paying any further interest. If you only make part payment interest is charged on the whole balance. Also, if you have done a 0% balance transfer to your card then your monthly payments will be paying that off before anything you have spent on purchases.

jonesMUFCforever

If you pay the statement balance today you will get charged interest from the date of the statement until MBNA receive payment.
So next month will include residue interest from this month's statement.
Whatever your balance is; overpay by at least of the amount of interest charged now to avoid it this going on and on.