Vanquis interest charges!!

muffinsugar

Hello

pls forgive me if i sound thick but i think im a novice to this.

I got a vanquis credit card in August for £250. I got it to build my credit rating as i had a bad credit in the past.

I was of the idea that if you use your CC regularly , it helps your credit rating rather than leaving it unused.
so i gt into the habit of using it regularly, paying it back in full during the month and using it again. But i realised that by the statement date , theres always some balance even though Ive paid the whole £250 within that statement period?

It seems im being charged ineterst on each statement because theres a balance left even though i thought that as long as i paid the whole £250 within the period, it really didnt matter if i had a balance by the statemnt date, i wont be charged interest?

am i wrong?

i really dont need the cc so getting charged ineterst is a waste of money to me

Thanks for your help

BlondBoy

You're better to wait for the statement each month, then pay off exactly the outstanding balance on the statement before the due date. eg if your statement says the balance is £220, pay that £220 after the statement but before the due date. That way you'll pay no interest.

Sounds like you're paying as you go through the month? If so, you're probably paying interest as you may not have paid the whole amount on the statement before the due date. Eg the statement says the balance is £220, but you've paid £170 before the due date.

It's great that you're keeping on top of it - good stuff! But perhaps counterintuitively, wait until your next statement, and then pay off the whole amount. You'll have one more month of interest if you do this, but if you keep doing it, you won't pay interest after that.

muffinsugar

Thanks a alot..that made it really simple. i appreciate. Yes i think tahts what im doing? paying as i go through the month

but also to understand you correctly, if i payall the outsatnding balance before the due date and i use it all again before the statement date (after the apyment due date, within that statement period), i wont be charged interest right? sorry if this has been explained and i didnt get it

i ask this because ive looked at my Nov statement, says i had a bal of £118.statement date is 20 Nov, payment due date is 16 dec, i made 2 payments of £22 and £190 on 22 nov and 27 nov respectively which is way above the outsanding bal of £118, though i added more and still used it all before the next statement date, but i was still charged interest.

Thats why im still confused because i pay the outsnading balnace all befor the due date?

[Deleted User]

Are some of your transactions cash or quasi-cash transactions?

Caz3121

the interest may have been residual / trailing interest from the previous month...this should end after 2 consecutive months of paying in full

chattychappy

Don't mean to sound patronising, but with financial products it's critical that you understand what the obligations are. Easy to fall into the trap of making assumptions based on the way you think things work, perhaps driven by advertising or what friends have told you.

The gist is they generate a monthly statement and provide a "due by" date. If you pay the FULL BALANCE SHOWN ON THE STATEMENT by the DUE BY date given on the statement, then you won't face interest. Note it's the statement balance that's important. By the time of the due date there may well be further transactions - but don't worry these will appear on the next statement. The dates probably won't align with pay days, calendar months etc. This system goes back to the pre-online days where everything was done by paper - posted statements and cheques sent back with tear-off slips.

The only complications to all this are:

1) Some transactions attract interest anyway. Eg gambling, ATM withdrawals, buying foreign exchange. This will be an expensive way of paying for those transactions.

2) Take care not to go above your limit. The limit is the maximum amount that can be owing at any time - including transactions that have yet to appear on a statement. This is a case where it is worth paying early. It is NOT just the maximum amount that is allowed per statement.

Good luck!

muffinsugar

Thanks a lot everyone. Really appreciate it. i now understand the process. i actually wasnt getting charged interest.

Was confused by seeing estimated interest charges on the statemnt which i assumed was coming out of my balance.

Spoke to them and they said i wasnt charged because i was paying the balance in full before the due date.

yksi

Keep it simple. If you're using it to build a credit history, spend £60-80 on it, then stop using it. Leave it alone until you get your statement, pay off the whole amount.

Why this amount? Because a utilisation of 25% is good and a high utilisation is not, and there is simply no benefit in spending any more on it unless it has cashback etc. As for what a "high" amount is, nobody can agree, but people do agree that you need to be spending more than a fiver

Willing2Learn

yksi wrote: »

Keep it simple. If you're using it to build a credit history, spend £60-80 on it, then stop using it. Leave it alone until you get your statement, pay off the whole amount.

Why this amount? Because a utilisation of 25% is good and a high utilisation is not, and there is simply no benefit in spending any more on it unless it has cashback etc. As for what a "high" amount is, nobody can agree, but people do agree that you need to be spending more than a fiver

Utilisation is irrelevant when you pay the statemented balance in full.

Rocksolid

Willing2Learn wrote: »

Utilisation is irrelevant when you pay the statemented balance in full.

Till a certain point, you are not supposed to spend 4k in a month as usual expense, for example...

You may do it once, not every month.

yksi wrote: »

Keep it simple. If you're using it to build a credit history, spend £60-80 on it, then stop using it. Leave it alone until you get your statement, pay off the whole amount.

Why this amount? Because a utilisation of 25% is good and a high utilisation is not, and there is simply no benefit in spending any more on it unless it has cashback etc. As for what a "high" amount is, nobody can agree, but people do agree that you need to be spending more than a fiver

No way, if the cc is low amount, it doesn't make sense to use only the 25% max...


@muffinsugar anyway, reading online Vanquis expect the payment each 1st of the month, so you need to make your payment before and do not touch the cc between your re-payment and the day after the repayment date, that is the 2nd of each month.
Even if you set up the direct deposit to pay in full each month, you need to be careful on this, so in the end of the month no cc usage, if you have multiple cc as I do, consider to apply the same rule to every card and to setup a common repayment date, keeping in mind, just for your reference, the date difference between them.


Furthermore, consider bank holidays and weekends, I would suggest to put every payment around 27-26th of the month, considering also the damn February.

[Deleted User]

Rocksolid wrote: »

Till a certain point, you are not supposed to spend 4k in a month as usual expense, for example...

You may do it once, not every month.





No way, if the cc is low amount, it doesn't make sense to use only the 25% max...


@muffinsugar anyway, reading online Vanquis expect the payment each 1st of the month, so you need to make your payment before and do not touch the cc between your re-payment and the day after the repayment date, that is the 2nd of each month.
Even if you set up the direct deposit to pay in full each month, you need to be careful on this, so in the end of the month no cc usage, if you have multiple cc as I do, consider to apply the same rule to every card and to setup a common repayment date, keeping in mind, just for your reference, the date difference between them.


Furthermore, consider bank holidays and weekends, I would suggest to put every payment around 27-26th of the month, considering also the damn February.

Who says that £4K per month isn’t a usual expense amount?

The 1st of the month is an example - your payment due date is XX days after your statement is produced which is usually dependent on when the account is opened.

It could the the 1st, 2nd, 10th, 25th or whatever depending on the account open date.