'Merchandise interest' charges

RedBern

Hi,

can someone clarify this for me please.

My daughter has a Nationwide Credit card. She is travelling in Asia at the moment and paid for a flight on her credit card - this is showing up as £51.84 on this month's statement - with 'merchandise interest at 1.385% per month' of £7.42.
Her opening balance on 8.7.07 on this account was £714.11 which was paid in full on 27/7/07 (ie by the due date) so is this charge correct? (I can't phone Nationwide as - of course - it isn't my card....) and I'm paying the bills on her behalf.

Milarky

The rate you quote is definitely 'purchase' and not 'cash' interest. To have been charged at the statement date the account must have been carrying forward a balance which was not paid off in full by the associated due date. But you say that July's balance was paid in full before then.

The only thing to do is go back to the previous statement and check that she definitely was paying in full then and wasn't charged any interest. If this bears out then it looks as though Nationwide may have made a mistake here.

[But it can't be because the transactions were treated as 'cash' - as I've said the cash rate is different - i.e. higher - so there would have been an interest-free period in principle]

good luck