Cash Transfer: is interest incurred on remaining balance if paid in full

demonted

Credit Card cash transfer to bank account:

When the 0% offer comes to an end and a balance of £3000 is stll outstanding and interest is being charged at the standard rate;

Will interest be incurred on the whole amount which was initially tranfered to the bank account (£6000) or only incurred on the current outstanding balance of £3000 ?

Also, once interest is charged at the Standard rate; if settled in full, will interest only be incurred for the months the £3000 iremains outstanding ?

glentoran99

Interest will be charged on whats outstanding when the statement is produced

agrinnall

What is trailing interest? thread

[Deleted User]

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demonted

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demonted

agrinnall wrote: »

What is trailing interest? thread

It appears that Trailing Interest is only incurred when a CC holder has repaid only the minimum payment throughout the duration of their CC borrowing and then make a lump-sum payment to clear the outstanding balance

Through-out the duration of my Cash Transfer, I've paid much more than the minimum payment each and every month.

My questions arose, as I wondered what's the benefit of CC's offering these interests free loans and whether there are clauses that I'm not aware of, which can be used to incur unexpected interest.

JimmyTheWig

demonted wrote: »

It appears that Trailing Interest is only incurred when a CC holder has repaid only the minimum payment throughout the duration of their CC borrowing and then make a lump-sum payment to clear the outstanding balance

No, trailing interest happens whenever the full balance isn't paid off in full each month unless the whole balance is on 0% interest.

My questions arose, as I wondered what's the benefit of CC's offering these interests free loans and whether there are clauses that I'm not aware of, which can be used to incur unexpected interest.

It is a way for them to gain customers from their competitors.

demonted

Thanks for the explanation

Well, I've never knowing incurrred Trailing Interest in the past and although I tend to pay more than the minimum payment there has been occasions when I've only paid the minimum payment, however, that CC debt has been cleared a few years ago.

All that currently outstanding is my 0% Cash Transfer, which I intend to clear, hopefully without incurring any interest what's so ever.

glentoran99

demonted wrote: »

Thanks for the explanation

Well, I've never knowing incurrred Trailing Interest in the past and although I tend to pay more than the minimum payment there has been occasions when I've only paid the minimum payment, however, that CC debt has been cleared a few years ago.

All that currently outstanding is my 0% Cash Transfer, which I intend to clear, hopefully without incurring any interest what's so ever.

Think your misunderstanding,


Trailing interested is where you have been paying off less than the full balance, then you pay the full amount, the next statement after that will have trailing interest even though you paid the full balance previously

demonted

I guess I am misunderstanding.

At present I've worked out monthly repayments to clear my current 0% Cash Tranfer before the interests free period ends, although I was curious at to what interest wound be charged should I allow the current outstanding balance (£3000) to extend beyond the 0% period, whether paid monthly at more than the minimum payment or by a lump sum payment.


A few years ago; I made a CC transaction for roughly £600 and I adjusted my repayment to clear this debt over 2 months, however I was charged interest on the full £600 during the second month although only £300 was still outstanding...... I guess this was " Trailing Interest" ?

When the 0% period ends on my Cash Tranfer and I only incur interest on any outstanding balance, then thats ok.

I just don't want to fall into a trap and end up incurring interest on the original sum transfered (£6000) because it wasn't cleared within the 0% period.

redux

glentoran99 wrote: »

Think your misunderstanding,


Trailing interested is where you have been paying off less than the full balance, then you pay the full amount, the next statement after that will have trailing interest even though you paid the full balance previously

Despite the accuracy of the description, I think one or two cards actually waive this.

A year and a bit ago I paid only part on one Capital One statement, then paid the following statement in full. Though I expected some, there was no trailing interest on the one after that.