Really confused about credit card 'balances'

moneymiser113

Hi all,
I have a normal lloyds credit card with a limit of £11,000+.
When I set it up online, I chose to pay off the balance in full each month. It has been like this for a few years.

However, every month when my current account pays my credit card balance in FULL the 'current balance' on the CC isn't £0.

Example: today £700 (ish) came out of my current account to pay off my CC in full. The £700 was my 'balance on last statement'. But after this payment processed, my 'current balance' on my CC is £1000 (ish). Hang on, shouldn't it have gone back down to £0???
:huh:

YorkshireBoy

How much have you spent since the last statement was produced?...about £300 (ish)?

moneymiser113

YorkshireBoy wrote: »

How much have you spent since the last statement was produced?...about £1,000 (ish)?

Well £700 was paid today to pay back the full balance. So wouldn't my last statement have been produced TODAY? Or is there a month's lag? Sorry I'm a bit clueless here.

I certainly haven't spent £1000 on my CC today to make my current balance £1000!

Cornucopia

The way it works is that the Account Month starts on a particular date. You then spend over the month, and they produce a statement on the same date in the next month. You then have a period of free credit within which to pay the full outstanding amount.

In the meantime, you are spending on month 2, and will, in due course receive the statement for month 2, a payment date for month 2, and this will be repeated every month as long as the account remains open and you continue to pay in full every month.

YorkshireBoy

moneymiser113 wrote: »

I certainly haven't spent £1000 on my CC today to make my current balance £1000!

Misread your OP. See my edit.

Many card providers update with your payment at the end of the day. If you check again in the morning all will be clear.

Dobbibill

This will be your statement balance up until approx the 6th or 7th ish of October.

If you log into your internet banking now and deduct the available funds from your credit limit it will give you the total you have spent since your statement was issued. This will be updated as your total balance over the next day or so.

Ben8282

moneymiser113 wrote: »

Well £700 was paid today to pay back the full balance. So wouldn't my last statement have been produced TODAY? Or is there a month's lag? Sorry I'm a bit clueless here.

I certainly haven't spent £1000 on my CC today to make my current balance £1000!

Surely you are not that clueless after having held this credit card for several years!
Was your last months statement produced on 31st? No
Was your last months statement produced on the payment due date? No
Your next statement date is clearly shown on your internet banking screen.
Your payment due date is clearly shown on your statement and your internet banking screen.

By the fact that your DD was taken today I am guessing your statement date is probably somewhere around 5th of the month.
Lets assume it was the 5th and your balance on 5th September was 0.
During September/October statement period you spent £700 so that the statement issued on 5th October was for £700.
Between then and now how much have you spent? Could it by any chance be £1000 .....
If it was that would have put the balance up to £1700.
Then today your DD was taken for an amount of £700.
So what do you suppose the current balance (which is what will appear on your next statement which will be issued around 5th November) is?

Just a further clarification. The full balance DD will take the full balance as shown on your previous statement; not whatever the balance of the credit card happens to be on the date when the DD is taken.

'A month's lag' is not quite the way I would phrase it, but yes you could say that. You get your statement. The statement shows a payment due date which is approximately 25 days after the statement date. Your DD for the balance of the last statement will be taken then. That is where the 'up to 56 days interest free credit' comes from.

Cornucopia

Maybe the OP doesn't realise that the statements that s/he sees online used to be paper documents (and for some people they still are).

So, one paper statement per month, postal services taking 2-3 days and bank transfers taking 3-4 days, and the whole cycle looks much more plausible.