Trailing Interest

ggmann66

To all those in the fortunate position of being able to pay off their credit card debt in a lump sum, be aware of something described as TRAILING INTEREST. When you go online and see a balance, the credit card companies are adding daily interest and the balance shown is for the last statement, not the current up to date amount. I thought I had paid my balances off to then find late payment charges etc added to interest from the previous statement. ..... Very cheeky of the companies not to let you know. However I complained in the strongest terms and they cancelled the trailing interest etc.

molerat

The companies do let you know if you bother to read and understand the T&Cs of the account. It is something that is continually brought up on this board but people still choose to ignore it.

PeacefulWaters

Very cheeky of the companies not to let you know

Very foolish of you not to think it through logically. If it was an overdraft attracting interest they'd still be charging you daily until payment is made. Why not in a credit card?

Oh, they do let you know. It is in the terms and conditions.

Hang around. You'll learn more on these forums. You're not the first to make the trailing interest assumption. But it's not the fault of your card company.

RG2015

ggmann66 wrote: »

However I complained in the strongest terms and they cancelled the trailing interest etc.

Asking politely also works.

bigadaj

Easiest way of thinking of it is that interest is always charged, but is cancelled if you pay in full.


If you don't pay in full then interest is charged from the date of purchase or transaction until the amount is paid, fairly simple really.

eco_warrior

ggmann66 wrote: »

To all those in the fortunate position of being able to pay off their credit card debt in a lump sum, be aware of something described as TRAILING INTEREST. When you go online and see a balance, the credit card companies are adding daily interest and the balance shown is for the last statement, not the current up to date amount. I thought I had paid my balances off to then find late payment charges etc added to interest from the previous statement. ..... Very cheeky of the companies not to let you know. However I complained in the strongest terms and they cancelled the trailing interest etc.

Understand why it’s annoying but it’s well known. Residual interest is the common term, think we’ve all been there!

Dobbibill

ggmann66 wrote: »

I thought I had paid my balances off to then find late payment charges etc added to interest from the previous statement

It's the statement balance that needs to be paid in full & on time to benefit from the interest free grace period.

The late payment suggests you may have paid it in full just not on time.

Going forward, maybe a direct debit to pay off your statement may help. The onus is then on the CC provider to take the money at the right time.

SuperAllyB

Dobbibill wrote: »

It's the statement balance that needs to be paid in full & on time to benefit from the interest free grace period.

The late payment suggests you may have paid it in full just not on time.

Going forward, maybe a direct debit to pay off your statement may help. The onus is then on the CC provider to take the money at the right time.

I read it as the OP had paid off the full balance, then not bothered checking his next statement as he expected it to be zero. But the trailing interest was there, resulting in that statement not being paid which attracted the late payment fee.

Dobbibill

SuperAllyB wrote: »

I read it as the OP had paid off the full balance, then not bothered checking his next statement as he expected it to be zero. But the trailing interest was there, resulting in that statement not being paid which attracted the late payment fee.

It looks like I have mis-read it. You are probably right.

Hopefully the OP will come back and clarify.