Paid most of CC balance - charged interest on full amount. Advice please.

Catulike

Hi

I recently got my credit card bill and found that I had an interest charge of £12.39 upon it. When I phoned up to query it I was told it was because I had inadvertantly underpaid my previous bill by £9.03 and they were charging me interest on the full bill (not just the bit that wasn't paid off in time).

When I complained I was told that it was in the terms and conditions so I will have to pay it.

Does anyone know if this is legal? (It may be in the terms and conditions but so are the interest charges that people are succesfully challenging).

I understand that they will charge me on the amount I did not pay off in time but surely they can't charge me on the part that I did? This seems an effort to get around the problem with penalty charges and seems to me to contravene the Unfair Contract Terms Act.

Any advice woiuld be greatly appreciated.

sinizterguy

That is what it says in most credit card contracts. If you dont pay off the full balance, you will be charged interest for the whole amount, not just what is left.

Catulike

Is it legally enforceable?

CLAPTON

The way it works is like this:

Interest is calculated daily from the time that you spend on the card and is charged until you actually pay the money off.

As a special arrangement however, if and only if you pay the full amount each month they cancel the interest and charge you nothing.
Hence the claim 'up to 50 (or whatever) days free credit'.

But if you don't pay the full amount, even if its by a small amount you then get charged as I described above.
This also means you will get a small interest charge next month which will be the interest incurred between the statement date and the day you pay.

It is how all credit cards work.

Catulike

Thanks for telling me. I didn't realise that they charged-and-then-cancelled.