Alliance & Leicester - £1 interest per month minimum

alanrowell

Just received a letter from A&L explaining the latest rule changes.

One of them caught my eye

if, in any statement period, the total interest payable on your account amounts to less than £1, this will now be rounded up to £1.

So owe a penny - get charged £1 interest each month.

Moggles_2

Presumably, this will apply to other cards issued by MBNA before long.

In July, HBOS introduced something similar. (The minimum interest payable per statement period is now 50p.)

YorkshireBoy

So, anything less than an £80 balance for a full month (or £40 for the max 56 days) and you lose out (at 15.9% APR). Anything more than £80 for a full month (or more than £40 for 56 days), and the change won't affect you.

The lower the balance, and the less time you carry it, the more you 'effectively' lose out.

Paying your bill in full will, of course, mean you pay nothing at all.

therivierakid

alanrowell wrote: »

Just received a letter from A&L explaining the latest rule changes.

One of them caught my eye



So owe a penny - get charged £1 interest each month.

I was charged this despite paying off the amount in full each month. I can only assume the charge was levied because the missus withdrew cash using the card... :mad:

Clariman

therivierakid wrote: »

I was charged this despite paying off the amount in full each month. I can only assume the charge was levied because the missus withdrew cash using the card... :mad:

Withdrawing cash using a credit card incurs interest from the day of the transaction, so even if you pay the next statement off in full, you will still be charged interest from the transaction date until you pay it off. It is a bad idea to use a credit card at a cash machine for this reason alone.

Clariman

therivierakid

Clariman wrote: »

Withdrawing cash using a credit card incurs interest from the day of the transaction, so even if you pay the next statement off in full, you will still be charged interest from the transaction date until you pay it off. It is a bad idea to use a credit card at a cash machine for this reason alone.

Clariman

Yes. The missus has been told. She won't be doing it again!

jonesMUFCforever

To stop this happening you need to overpay the next statement by the amount of estimated interest.