Credit Cards Explained guide

Former_MSE_Karl

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Credit Cards Explained guide.

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Thanks folks,

good_cooker

An alert to any Capital One credit card holders out there! Despite clearing last month's balance in full, I was charged interest! Queried the charge, and was told they have made 'a slight change' to Ts & Cs. Now you have to make sure you clear the balance in full EVERY SINGLE month, to avoid being charged interest.
Pay less than the whole balance one month - they will of course charge you interest that month. BUT they will ALSO charge you interest the following month - even if you cleared the balance in full that second month.
Does anyone else agree with me that this is not a "slight change" - and that, moreover, as a 'reputable lender' they should have made a bigger effort to notify customers?
I almost always pay in full anyway.. but I think this will be another hammer blow for those who are struggling anyway.

[Deleted User]

That is standard across just about all card providers. It's known as trailing interest.

Are you sure it's a change? You would have received a Notice of Variation.

molerat

The way that credit cards have worked for as long as I can remember.

eskbanker

good_cooker wrote: »

Now you have to make sure you clear the balance in full EVERY SINGLE month, to avoid being charged interest.
Pay less than the whole balance one month - they will of course charge you interest that month. BUT they will ALSO charge you interest the following month - even if you cleared the balance in full that second month.

You don't have to "clear the balance in full EVERY SINGLE month to avoid being charged interest", just two consecutive months, after which there would be no more trailing interest.

The interest in the second month relates to the period between statement date and payment date in the first month, so if you know you'll be clearing your balance in full after previously incurring interest, then pay quickly after the statement date in month 1, which will minimise any trailing interest in month 2....

good_cooker

zx81 - It's certainly new for me - I've had this card since 1985. Perhaps this has been standard practice for more recent cards, but it's the first time I've come across it, and their own reply to me clearly said it was new. Nor does this condition apply on any of the other credit cards I hold.

good_cooker

Not on this card which I've had over 30 years, nor ever been the case on any of the other cards I've held over the years - or indeed hold at the moment.
I don't object to paying interest if balance not paid in full. That's the deal I signed up for. Nor do I disagree with their right to make changes.
But I did object to such a fundamental change to my contract, without having my attention very clearly drawn to it.

[Deleted User]

good_cooker wrote: »

Nor does this condition apply on any of the other credit cards I hold.

I'm sure it does. All cards charge interest on the amount you borrow, for the length of time you borrow it for.

Which cards do you hold?

PeacefulWaters

good_cooker wrote: »

Not on this card which I've had over 30 years, nor ever been the case on any of the other cards I've held over the years - or indeed hold at the moment.
I don't object to paying interest if balance not paid in full. That's the deal I signed up for. Nor do I disagree with their right to make changes.
But I did object to such a fundamental change to my contract, without having my attention very clearly drawn to it.

Strange. I must have had twenty or more credit cards over the years and trailing interest from part payments has always occurred.

eskbanker

PeacefulWaters wrote: »

Strange. I must have had twenty or more credit cards over the years and trailing interest from part payments has always occurred.

I find it hard to believe that an MSE forum regular* would have paid interest on twenty or more credit cards!


* other than one in particular who perversely perceives paying interest as a virtue....

PeacefulWaters

eskbanker wrote: »

I find it hard to believe that an MSE forum regular* would have paid interest on twenty or more credit cards!


* other than one in particular who perversely perceives paying interest as a virtue....

Who says I paid? I just read and understood!