Charged interest after BT

in Credit Cards
4 replies 584 views
Hey, I've had a very confusing (and frustrating) time with Halifax. I completed a balance transfer on 04/07 to Virgin from my Halifax CC - on 18/07 I was charged interest on the account despite it being empty for 2 weeks. (my statement dates run 18-18 of the month, with payment by 13)
I finally managed to get through to CC services yesterday evening after showing a member of staff in branch my accounts and they said it didn't seem right... and this is where my brain started getting fried, along with my nerves....

I asked why I was charged interest on an account that had been cleared and was told that the interest works a month in arrears - fair enough, but pointed out that that months statement and balance were cleared. I was then told it interest from the month before, so on 18/07 I got charged interest for the 18/05-18/06 balance, though I'd paid interest on 18/06. I was told I had to have cleared a balance 2 months in a row in order not to incur interest the next month and that's how all CCs work. I pointed out that the two other CC I have charge me any interest for the 4 weeks preceding it, not up to 8 weeks before and that when I transferred a Barclaycard to them before, Barclays didn't charge me interest that month as the account was cleared. I spoke to a Halifax manager who then said that I was charged less interest than normal that month because I'd paid off more than the statement amount (obviously, it had been cleared). When I said she wasn't making any sense as it had gone from interest being 6 weeks in arrears to 2 months back to being related to that month's statement....she said she understood. I still don't!

Can anyone help me understand what the hell happened there with Halifax as their method of working out/adding interest isn't something I've experienced from other providers,and I still don't understand their stance... Is this as normal as they said and I've just been 'lucky' with my other cards?

Replies

  • Caz3121Caz3121 Forumite
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    it is called trailing interest...there is an old post here https://forums.moneysavingexpert.com/showthread.php?t=1251129
    (not sure why you have not had this with other cards)
  • zx81zx81 Forumite
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    It's standard on all credit cards. It's the residual interest that built up between your last statement and the date you made payment.

    Once you have cleared two consecutive statements in full, there will be no more interest.
  • edited 22 July 2018 at 8:33AM
    DobbibillDobbibill Forumite, Ambassador
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    edited 22 July 2018 at 8:33AM
    If you do not pay your balance in full every month then the following month you will have trailing interest. To return to the grace period of up to 56days on purchases you need to clear your balance in full for 2 statements consecutively.

    When statement 1 is produced you then have approx 25 days before your due date. Every day you have a balance on your card interest is calculated, if it's paid in full it doesn't hit the following statement. If you opt not to pay in full it gets added to statement 2.

    It isn't added in advance as you are given the option to pay in full and the CC company cannot predict what you will do. You may pay in full, pay half, the min or another amount over the min but not the full balance.

    If you pay statement 2 in full, you still have the calculation of interest for the amount you owe from the date the statement was produced until the payment date of statement 2. This is added to statement 3. Pay in full like you did with statement 2 and you will now return 'up to 56 days grace period' rule.
    I’m a Forum Ambassador and I support the Forum Team on the Budgeting & Bank Accounts, Credit Cards, Credit File & Ratings and Energy boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing [email protected]. All views are my own and not the official line of MoneySavingExpert.

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  • DobbibillDobbibill Forumite, Ambassador
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    Also don't add purchases to a BT card unless it has 0% on purchases as well as you won't be paying your 'balance' in full and will incur interest on the purchases.
    I’m a Forum Ambassador and I support the Forum Team on the Budgeting & Bank Accounts, Credit Cards, Credit File & Ratings and Energy boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing [email protected]. All views are my own and not the official line of MoneySavingExpert.

    If you can't be the best -
    Just be better than you were yesterday.
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