Why are Vanquis charging me £22.74 on a outstanding balance of £65?

J4M13

I opened a Credit card with Vanquis in late January 2015, I have made one purchase on the card for £465 on the 4th of February. I received my first bill on the 4th of March with minimum payment of £20.74, I actually made a payment of £400.
Today I have received my second bill and to say I was surprised to see a minimum payment of £22.74 is an understatement, also my balance owed has risen to £85.26, this is because (according to my statement) of billed deferred finance payments £11.26 and purchase interest of £10.01.
I have phoned Vanquis and felt the operator ran through her explanation and I'm none the wiser why these charges are so large. I may be wrong and if I am please let me know but my understanding is interest is billed after the payment date and only for money owing (in my case £65) and not for the whole amount borrowed, which it seems they're charging me.
I realise there was a length of time between the card arriving and the first statement and this might explain the interest chargers, but since I didn't have a bill to pay, how could I pay it?
It seems to me they have delayed the first statement and then charged me the interest for the whole time it was owing, like they do with cash withdrawals.
Does anyone have experiences with this type of thing? And do they have any advice about how to handle the situation? I am considering closing the account.
Thanks in advance for any answers

redux

The interest is pro rata to the amount and the time borrowed, thus it's been charged on £465 for most of the time, a bit over a month's worth, and £65 for part.

It would have been good to stretch a bit and pay off all of the statement balance by the due date, thus avoiding being charged interest.

J4M13

Thanks for the quick response, it must be the way Vanquis operate, I have cards with other companies and they all sent a statement within a few days of receiving the card, Vanquis didn't and I guess this is the reason why, I would of paid the amount in full if I'd known they where going to charge interest this way, instead of the way other cards do.
A case of live and learn, thanks again.

SnowTiger

J4M13 wrote: »

Thanks for the quick response, it must be the way Vanquis operate, I have cards with other companies and they all sent a statement within a few days of receiving the card, Vanquis didn't and I guess this is the reason why, I would of paid the amount in full if I'd known they where going to charge interest this way, instead of the way other cards do.
A case of live and learn, thanks again.

That's the way credit cards work, with obvious exceptions such as interest-free periods. If you don't pay off your balance in full you're charged interest on purchases from the date they hit your statement.

You didn't pay your March statement in full, so you've been charged interest on your purchase on 4th February until 4th March. This is the deferred interest.

The bad new is that you'll be charged interest again on next month's statement.

redux

J4M13 wrote: »

Thanks for the quick response, it must be the way Vanquis operate, I have cards with other companies and they all sent a statement within a few days of receiving the card, Vanquis didn't and I guess this is the reason why, I would of paid the amount in full if I'd known they where going to charge interest this way, instead of the way other cards do.
A case of live and learn, thanks again.

I don't understand this point. Their method seems very similar to other cards.

If they had sent a statement dated early February, it would have had no transactions on it anyway. Your first transaction appears in the first few days on the next statement, and the due payment date would be stated on there.

Thus there can be 50 to 56 days from the earliest items until the statement they then appear on is paid, and hence why it can seem that the interest is a bit high if the full balance wasn't paid.

J4M13

I'm sorry it's me who is confusing things, I thought interest was only due on any amount remaining after payment and not for the whole amount borrowed over the month, usually I'll pay off the amount in full, so was surprised when the charges where more than I was expecting.

And I guess the point I wanted to make, is that I thought the first statement would have been created a little sooner than 40 days after the account was opened, I'd consider establishing a pay cycle earlier being the norm, rather than leaving it so long. I wasn't given the opportunity to pay it sooner and prevent the higher interest charges, which is unique to Vanquis in my experience.

One thing I am sure of you will know more about these things than I do.
As I said in my original post, I got it wrong and understand why, thanks for helping, it's appreciated, even if it wasn't what I was hoping to hear.

SnowTiger

J4M13 wrote: »

And I guess the point I wanted to make, is that I thought the first statement would have been created a little sooner than 40 days after the account was opened, I'd consider establishing a pay cycle earlier being the norm, rather than leaving it so long. I wasn't given the opportunity to pay it sooner and prevent the higher interest charges, which is unique to Vanquis in my experience.

Complete rubbish.

You made a purchase on 4th February. You received your statement on 4th March.

You had until around 25th March to pay it (in full). You chose to only make a part payment.

If you had paid the statement balance in full before it was due you wouldn't have been charged any interest.

By sending your first statement a month after your first purchase Vanquis would have given your the maximum interest-free period.

J4M13

You are correct, if I had paid the full amount then I would have nothing to pay in interest, And nowhere have I written anything otherwise, if I didn't understand this I shouldn't have a card to begin with.
Yes, Vanquis did give me maximum time to pay, but the flip side is they also maximised their chance to gain more interest.
In my experience, no other CC company waits till a month after first purchase to send the first statement, which has been my point all along. If I'm wrong thought, please accept my apologies.

redux

J4M13 wrote: »

Yes, Vanquis did give me maximum time to pay, but the flip side is they also maximised their chance to gain more interest.
In my experience, no other CC company waits till a month after first purchase to send the first statement, which has been my point all along. If I'm wrong thought, please accept my apologies.

These timings are just coincidences.

They were not charging you interest before the first statement arrived. But there would potentially be interest if you then chose not to pay the statement in full.

If on the other hand you did pay in full, you would have had 50 to 56 days free credit. So if you are planning a large purchase and will eventually pay in full, doing it just after the statement date is ideal.

Thus for me a few months ago I delayed spending £600 on something for work by a day. This meant I could wait another month to pay for it, by which time I'd have been paid for doing the job that used it.

PeacefulWaters

J4M13 wrote: »

Yes, Vanquis did give me maximum time to pay, but the flip side is they also maximised their chance to gain more interest.

Only if you didn't pay in full. You had complete control over the outcome.

I'm sorry, you seem to be playing the victim of a conspiracy when there is no conspiracy.

Credit cards charge interest from the date a purchase appears. You get a statement and an opportunity to pay the balance in full. If you do this, they very generously waive the interest.

If you don't pay in full, they charge you.

Lesson to learn: Clear every balance fully before the due date.

[Deleted User]

Vanquis is high risk & high interest lending - I would close, if you don't need it get rid

Anyone taking this out would be best reading up and understanding how likes of Amigo (purely in the payment sense!) and other short term loan lenders work with 'waiting days', it's roughly all the same principal used after all


This might be the lady to follow!
http://www.mirror.co.uk/money/stella-creasy-predatory-credit-cards-5004623