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Basic Vanquis Credit Card Interest Help
irelavv
Posts: 75 Forumite
Hello guys,
Apologies in advance if this has been explained on here before but I'm struggling to do 'basic maths' on my credit card's estimated interest. I'm kindly asking if someone could please teach me how Vanquis have estimated my next month's interest at £2.90?
As a side note, I've had three consecutive monthly statements (October, November and December) which were all cleared in full and on time via Direct Debit. The estimated interest on all three statements was at £0.00.
Thanks in advance and here's all the info.
Statement date: 5 / 1 / 2020
This month's minimum payment: £10.00
This minimum payment must reach your account by: 30 / 1 /2020
This month's balance: £50.90
Your credit limit: £500
Available to spend: £449.10
Your overlimit amount: £0
Payments received:
We have received last month's payment of £5.20
Next month's estimated interest: £2.90
Transactions
3 / 12 / 2019: Purchase in UK at £50.90
Your Interest Rates
Purchase Interest Monthly Rate: 2.84%
Purchase Effective Annual Rate: 39.94%
Cash Interest Monthly Rate: 2.84%
Cash Effective Annual Rate: 39.94%
The required payment of £50.90 will be claimed by Direct Debit from your bank account on or just after 30/01/20.
Interest Free Period: Up to 56 days' interest free period on purchase transactions only, where you have paid off two or more consecutive current statement balances in full and on time. There is no interest free period on cash advances, convenience cheques, balance transfers or gambling transactions.
Interest charging information: Interest is generally charged from the date the transaction or other amount is debited to your Account, until repayment in full. Interest is charged on the daily outstanding balance on your account and debited to your account at the end of each statement period. At statement date, we will add the interest we charge to the outstanding balance on your account. This means that you will generally pay interest on interest.
Interest: Remember the best way to pay less interest is to pay off your monthly balance in full, or at least as much of the outstanding balance as you can. This is because interest is charged on a daily basis and the longer you delay your payment the more interest you will be charged, even if you pay before the Payment Due Date. The estimated interest is only a guide and is based on the Minimum Payment reaching us by the Payment Due Date. It is for guidance only and will vary, depending on when your payment reached us, your payment amount, and whether you use your card before the next Statement Date. If you pay off the balance in full by the Payment Due Date on two statements in a row, you won't be charged interest on any purchase transactions on the second statement.
Apologies in advance if this has been explained on here before but I'm struggling to do 'basic maths' on my credit card's estimated interest. I'm kindly asking if someone could please teach me how Vanquis have estimated my next month's interest at £2.90?
As a side note, I've had three consecutive monthly statements (October, November and December) which were all cleared in full and on time via Direct Debit. The estimated interest on all three statements was at £0.00.
Thanks in advance and here's all the info.
Statement date: 5 / 1 / 2020
This month's minimum payment: £10.00
This minimum payment must reach your account by: 30 / 1 /2020
This month's balance: £50.90
Your credit limit: £500
Available to spend: £449.10
Your overlimit amount: £0
Payments received:
We have received last month's payment of £5.20
Next month's estimated interest: £2.90
Transactions
3 / 12 / 2019: Purchase in UK at £50.90
Your Interest Rates
Purchase Interest Monthly Rate: 2.84%
Purchase Effective Annual Rate: 39.94%
Cash Interest Monthly Rate: 2.84%
Cash Effective Annual Rate: 39.94%
The required payment of £50.90 will be claimed by Direct Debit from your bank account on or just after 30/01/20.
Interest Free Period: Up to 56 days' interest free period on purchase transactions only, where you have paid off two or more consecutive current statement balances in full and on time. There is no interest free period on cash advances, convenience cheques, balance transfers or gambling transactions.
Interest charging information: Interest is generally charged from the date the transaction or other amount is debited to your Account, until repayment in full. Interest is charged on the daily outstanding balance on your account and debited to your account at the end of each statement period. At statement date, we will add the interest we charge to the outstanding balance on your account. This means that you will generally pay interest on interest.
Interest: Remember the best way to pay less interest is to pay off your monthly balance in full, or at least as much of the outstanding balance as you can. This is because interest is charged on a daily basis and the longer you delay your payment the more interest you will be charged, even if you pay before the Payment Due Date. The estimated interest is only a guide and is based on the Minimum Payment reaching us by the Payment Due Date. It is for guidance only and will vary, depending on when your payment reached us, your payment amount, and whether you use your card before the next Statement Date. If you pay off the balance in full by the Payment Due Date on two statements in a row, you won't be charged interest on any purchase transactions on the second statement.
0
Comments
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You will not be charged interest if you pay the full statement balance by the statement due date.
All credit card providers are required to show an estimated interest amount which is their estimate of the interest that you will pay if you make only the minimum payment and make no further transactions. The fact that this estimated amount is shown on the statement does not mean that it will be charged.
if you have a full balance direct debit set up as it appears you have you will not be charged any interest on purchase transactions.0 -
Hello guys,
Apologies in advance if this has been explained on here before but I'm struggling to do 'basic maths' on my credit card's estimated interest. I'm kindly asking if someone could please teach me how Vanquis have estimated my next month's interest at £2.90?
As a side note, I've had three consecutive monthly statements (October, November and December) which were all cleared in full and on time via Direct Debit. The estimated interest on all three statements was at £0.00.
Thanks in advance and here's all the info.
Statement date: 5 / 1 / 2020
This month's minimum payment: £10.00
This minimum payment must reach your account by: 30 / 1 /2020
This month's balance: £50.90
Your credit limit: £500
Available to spend: £449.10
Your overlimit amount: £0
Payments received:
We have received last month's payment of £5.20
Next month's estimated interest: £2.90
Transactions
3 / 12 / 2019: Purchase in UK at £50.90
Your Interest Rates
Purchase Interest Monthly Rate: 2.84%
Purchase Effective Annual Rate: 39.94%
Cash Interest Monthly Rate: 2.84%
Cash Effective Annual Rate: 39.94%
The required payment of £50.90 will be claimed by Direct Debit from your bank account on or just after 30/01/20.
It's an estimate and assumes a few things, such as:- no additional spend on account
- you only make minimum payment
- minimum payment is made on 30th January 2020
If you don't pay your full statement balance on or before it's due you're charged interest on your £50.90 transaction from the date it hit your account, which is likely to be a day or two after the transaction.
Daily interest is calculated using this formula:
((APR+1)^(1/365))-1
This is how it works out on a daily basis, assuming the transaction hits your account the day after it was made.Daily Interest Date Balance interest running total [I]03/12/19 £50.90 (transaction hasn't hit account yet)[/I] 04/12/19 £50.90 £0.05 £0.05 05/12/19 £50.95 £0.05 £0.09 06/12/19 £50.99 £0.05 £0.14 07/12/19 £51.04 £0.05 £0.19 08/12/19 £51.09 £0.05 £0.23 09/12/19 £51.13 £0.05 £0.28 10/12/19 £51.18 £0.05 £0.33 11/12/19 £51.23 £0.05 £0.38 12/12/19 £51.28 £0.05 £0.42 13/12/19 £51.32 £0.05 £0.47 14/12/19 £51.37 £0.05 £0.52 15/12/19 £51.42 £0.05 £0.57 16/12/19 £51.47 £0.05 £0.61 17/12/19 £51.51 £0.05 £0.66 18/12/19 £51.56 £0.05 £0.71 19/12/19 £51.61 £0.05 £0.76 20/12/19 £51.66 £0.05 £0.80 21/12/19 £51.70 £0.05 £0.85 22/12/19 £51.75 £0.05 £0.90 23/12/19 £51.80 £0.05 £0.95 24/12/19 £51.85 £0.05 £0.99 25/12/19 £51.89 £0.05 £1.04 26/12/19 £51.94 £0.05 £1.09 27/12/19 £51.99 £0.05 £1.14 28/12/19 £52.04 £0.05 £1.19 29/12/19 £52.09 £0.05 £1.23 30/12/19 £52.13 £0.05 £1.28 31/12/19 £52.18 £0.05 £1.33 01/01/20 £52.23 £0.05 £1.38 02/01/20 £52.28 £0.05 £1.43 03/01/20 £52.33 £0.05 £1.47 04/01/20 £52.37 £0.05 £1.52 05/01/20 £52.42 £0.05 £1.57 06/01/20 £52.47 £0.05 £1.62 07/01/20 £52.52 £0.05 £1.67 08/01/20 £52.57 £0.05 £1.72 09/01/20 £52.62 £0.05 £1.76 10/01/20 £52.66 £0.05 £1.81 11/01/20 £52.71 £0.05 £1.86 12/01/20 £52.76 £0.05 £1.91 13/01/20 £52.81 £0.05 £1.96 14/01/20 £52.86 £0.05 £2.01 15/01/20 £52.91 £0.05 £2.06 16/01/20 £52.96 £0.05 £2.10 17/01/20 £53.00 £0.05 £2.15 18/01/20 £53.05 £0.05 £2.20 19/01/20 £53.10 £0.05 £2.25 20/01/20 £53.15 £0.05 £2.30 21/01/20 £53.20 £0.05 £2.35 22/01/20 £53.25 £0.05 £2.40 23/01/20 £53.30 £0.05 £2.45 24/01/20 £53.35 £0.05 £2.50 25/01/20 £53.40 £0.05 £2.55 26/01/20 £53.45 £0.05 £2.59 27/01/20 £53.49 £0.05 £2.64 28/01/20 £53.54 £0.05 £2.69 29/01/20 £53.59 £0.05 £2.74 30/01/20 £43.64 £0.04 £2.78 (£10 minimum payment made) 31/01/20 £43.68 £0.04 £2.82 01/02/20 £43.72 £0.04 £2.86 02/02/20 £43.76 £0.04 £2.90 03/02/20 £43.80 (balance on new statement)
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As a side note, I've had three consecutive monthly statements (October, November and December) which were all cleared in full and on time via Direct Debit. The estimated interest on all three statements was at £0.00.
I've just checked through a few old Vanquis statements. They show estimated interest of £0 despite there being a balance on the account.
My guess is previous statements showing an estimated interest of £0 was an error that has been corrected.0 -
That looks confusing to me too.
I mean... Going by what you posted, paying by DD will see you pay on or after day 58 - thus incurring a charge! I am going to guess it's just wrong in the way it's being displayed to you.
Most cards pull the DD 15-25 days after the Bill to avoid this type of issue. I would hope someone can clarify.
There seems to be a similar thread here https://forums.moneysavingexpert.com/discussion/603600/vanquis-beware-interest-charge on a similar/related issue. Their statement/billing cycle is greater than their interest-free window.0 -
I have read the other thread, started in 2007 and closed in 2011, which details an apparent problem unique to Vanquis.
Not having a Vanquis card, I can't really comment but what I can say is that in the 40+ years I have been using credit cards I have never encountered a situation where interest is charged under the circumstances outlined in the other thread.
If you pay the full balance by the payment due date then interest will not be charged on purchase transactions. The sole exception to this are the very rare low rate cards which have no interest free period at all.
If you pay by direct debit and in the very unlikely event that the statement says that the direct debit will be taken on a date after the payment due date then please let us know. If the credit card company fails to take the direct debit on the due date (i.e. the date when they say it will be taken) it is their problem not yours.0 -
I don't use Vanquis. It looks to me as if the minimum payment in the previous month was equal to the balance. That would have given no estimated interest.
This month the spend is higher, meaning the minimum payment won't cover it all, so there is an estimated interest - assuming a minimum payment, as has already been said.0 -
That looks confusing to me too.
I mean... Going by what you posted, paying by DD will see you pay on or after day 58 - thus incurring a charge! I am going to guess it's just wrong in the way it's being displayed to you.
Most cards pull the DD 15-25 days after the Bill to avoid this type of issue. I would hope someone can clarify.
There seems to be a similar thread here https://forums.moneysavingexpert.com/discussion/603600/vanquis-beware-interest-charge on a similar/related issue. Their statement/billing cycle is greater than their interest-free window.
In this instance I would guess that the actual transaction date was 3rd December but it probably didn't hit the account until 6th or 7th making it less than 56 days.0 -
That looks confusing to me too.
I mean... Going by what you posted, paying by DD will see you pay on or after day 58 - thus incurring a charge! I am going to guess it's just wrong in the way it's being displayed to you.
Most cards pull the DD 15-25 days after the Bill to avoid this type of issue. I would hope someone can clarify.
There seems to be a similar thread here https://forums.moneysavingexpert.com/discussion/603600/vanquis-beware-interest-charge on a similar/related issue. Their statement/billing cycle is greater than their interest-free window.
Lots of garbage is said about Vanquis.
In this case the clue is in the OP:Next month's estimated interest: £2.90
Transactions
3 / 12 / 2019: Purchase in UK at £50.90
[...]
The required payment of £50.90 will be claimed by Direct Debit from your bank account on or just after 30/01/20.
OP spent £50.90 on 3rd December 2019. DD for £50.90 will be taken on 30th January 2021.
Their Vanquis statement simply indicates how much interest they would be charged if they only paid the minimum when it was due:
Next month's estimated interest: £2.90
All my other credit cards give a similar estimate for the following month's interest. Don't yours? Which ones do you use?0 -
I am very grateful for your responses, guys. It really means a lot that you've shared your thoughts and experiences and even did some maths in order to help me!
I do have a full balance DD in place, Ben, and I agree with your statement. My plan was to make another purchase of £50.90 this month and pay off the current statement in full via DD (kind of a rolling over purchase every month since it's just a monthly bus ticket). But I may scrap that because I'm worried about interest charges even if I don't just make the minimum payment.You will not be charged interest if you pay the full statement balance by the statement due date. All credit card providers are required to show an estimated interest amount which is their estimate of the interest that you will pay if you make only the minimum payment and make no further transactions. The fact that this estimated amount is shown on the statement does not mean that it will be charged. if you have a full balance direct debit set up as it appears you have you will not be charged any interest on purchase transactions.
I agree, jcontest, the total number of days (counting from date of purchase up to and including payment date) would be exactly 59 days. This would put me three days over the 56 days of interest-free period and I would incur an interest charge if I were to either: a) make an additional purchase before next statement; and/or b) make only the minimum payment by the payment date, right?that looks confusing to me too. I mean... Going by what you posted, paying by DD will see you pay on or after day 58 - thus incurring a charge! I am going to guess it's just wrong in the way it's being displayed to you. Most cards pull the DD15-25 days after the bill to avoid this type of issue. I would hope someone can clarify.
There seems to be a similar thread here https://forums.moneysavingexpert.com/discussion/603600/vanquis-beware-interest-charge on a similar/related issue. Their statement/billing cycle is greater than their interest-free window.
I've also read the topic you linked and it does sound like a similar case to mine where any interest I may be charged for this statement would be incorrect even if I pay in full and on time?
This is my very first credit card, Ben. I'm still getting used to all the rules of efficient money borrowing but I hope - like everyone else - I won't incur any unwanted interest and fees. I did plan to let the DD be taken in full and on time but I just may pay up earlier just to be safe. Even if I'm wrongly charged interest (assuming I abide by their Terms which I do), at least I wouldn't have waited 59 days which puts me over the interest-free period, right?I have read the other thread, started in 2007 and closed in 2011, which details an apparent problem unique to vanquis.
Not having a vanquis card, I can't really comment but what i can say is that in the 40+ years I have been using credit cards i have never encountered a situation where interest is charged under the circumstances outlined in the other thread.
If you pay the full balance by the payment due date then interest will not be charged on purchase transactions. The sole exception to this are the very rare low rate cards which have no interest free period at all.
If you pay by direct debit and in the very unlikely event that the statement says that the direct debit will be taken on a date after the payment due date then please let us know. If the credit card company fails to take the direct debit on the due date (i.e. The date when they say it will be taken) it is their problem not yours.
My first statement had £0.00 balance (newly issued card). Second statement had a balance of £10.98 - minimum payment at £10.00 but I paid in full and on time by DD. Third statement had a balance of £5.20 - minimum payment of £5.20, paid in full and on time via DD. Fourth statement was my OP.i don't use vanquis. It looks to me as if the minimum payment in the previous month was equal to the balance. That would have given no estimated interest.
This month the spend is higher, meaning the minimum payment won't cover it all, so there is an estimated interest - assuming a minimum payment, as has already been said.
You are right, nebulous - my minimum payment last month was equal to the balance. However, the month before that it was not equal to the balance - do you think that might have been a mistake on their end? I'm guessing that since it was within the 56 interest-free period then that might explain the £0.00 estimated interest but I'm not sure, either...
SuperAllyB, the paper statement shows the transaction on 3rd December. However, online and on my mobile app it actually says it's the 4th. Either way, I'll still be over the 56 interest-free period. That would mean the transaction hit the account earlier, right? I'm a bit confused now too :rotfl:SuperAllyB wrote: »In this instance I would guess that the actual transaction date was 3rd December but it probably didn't hit the account until 6th or 7th making it less than 56 days.0 -
When I try and calculate I get the following:It's an estimate and assumes a few things, such as:- no additional spend on account
- you only make minimum payment
- minimum payment is made on 30th January 2020
If you don't pay your full statement balance on or before it's due you're charged interest on your £50.90 transaction from the date it hit your account, which is likely to be a day or two after the transaction.
Daily interest is calculated using this formula:
((APR+1)^(1/365))-1
This is how it works out on a daily basis, assuming the transaction hits your account the day after it was made.Daily Interest Date Balance interest running total [I]03/12/19 £50.90 (transaction hasn't hit account yet)[/I] 04/12/19 £50.90 £0.05 £0.05 05/12/19 £50.95 £0.05 £0.09 06/12/19 £50.99 £0.05 £0.14 07/12/19 £51.04 £0.05 £0.19 08/12/19 £51.09 £0.05 £0.23 09/12/19 £51.13 £0.05 £0.28 10/12/19 £51.18 £0.05 £0.33 11/12/19 £51.23 £0.05 £0.38 12/12/19 £51.28 £0.05 £0.42 13/12/19 £51.32 £0.05 £0.47 14/12/19 £51.37 £0.05 £0.52 15/12/19 £51.42 £0.05 £0.57 16/12/19 £51.47 £0.05 £0.61 17/12/19 £51.51 £0.05 £0.66 18/12/19 £51.56 £0.05 £0.71 19/12/19 £51.61 £0.05 £0.76 20/12/19 £51.66 £0.05 £0.80 21/12/19 £51.70 £0.05 £0.85 22/12/19 £51.75 £0.05 £0.90 23/12/19 £51.80 £0.05 £0.95 24/12/19 £51.85 £0.05 £0.99 25/12/19 £51.89 £0.05 £1.04 26/12/19 £51.94 £0.05 £1.09 27/12/19 £51.99 £0.05 £1.14 28/12/19 £52.04 £0.05 £1.19 29/12/19 £52.09 £0.05 £1.23 30/12/19 £52.13 £0.05 £1.28 31/12/19 £52.18 £0.05 £1.33 01/01/20 £52.23 £0.05 £1.38 02/01/20 £52.28 £0.05 £1.43 03/01/20 £52.33 £0.05 £1.47 04/01/20 £52.37 £0.05 £1.52 05/01/20 £52.42 £0.05 £1.57 06/01/20 £52.47 £0.05 £1.62 07/01/20 £52.52 £0.05 £1.67 08/01/20 £52.57 £0.05 £1.72 09/01/20 £52.62 £0.05 £1.76 10/01/20 £52.66 £0.05 £1.81 11/01/20 £52.71 £0.05 £1.86 12/01/20 £52.76 £0.05 £1.91 13/01/20 £52.81 £0.05 £1.96 14/01/20 £52.86 £0.05 £2.01 15/01/20 £52.91 £0.05 £2.06 16/01/20 £52.96 £0.05 £2.10 17/01/20 £53.00 £0.05 £2.15 18/01/20 £53.05 £0.05 £2.20 19/01/20 £53.10 £0.05 £2.25 20/01/20 £53.15 £0.05 £2.30 21/01/20 £53.20 £0.05 £2.35 22/01/20 £53.25 £0.05 £2.40 23/01/20 £53.30 £0.05 £2.45 24/01/20 £53.35 £0.05 £2.50 25/01/20 £53.40 £0.05 £2.55 26/01/20 £53.45 £0.05 £2.59 27/01/20 £53.49 £0.05 £2.64 28/01/20 £53.54 £0.05 £2.69 29/01/20 £53.59 £0.05 £2.74 30/01/20 £43.64 £0.04 £2.78 (£10 minimum payment made) 31/01/20 £43.68 £0.04 £2.82 01/02/20 £43.72 £0.04 £2.86 02/02/20 £43.76 £0.04 £2.90 03/02/20 £43.80 (balance on new statement)
((APR+1)^(1/365))-1 = ((39.94%+1)^0.00273972)-1 = (1.3994^0.000273972)-1 = 1.000092 -1 = 0.000092
I'm sorry if this sounds and looks really dumb but could you please explain what was wrong with my calculation? I'm really interested in learning the formulae because it will be very useful in the future for sure.I've just checked through a few old Vanquis statements. They show estimated interest of £0 despite there being a balance on the account.
My guess is previous statements showing an estimated interest of £0 was an error that has been corrected.
My thoghts exactly, SnowTiger. One of my previous Vanquis statements had minimum payment which was less than the balance itself. Maybe that's a mistake on their end? However, it was less than the 56 interest-free days from the day the transaction hit the account until payment date.
Like I said to Ben this is my first ever credit card. I'm trying to be as careful and thoughtful about spending as I can. So even if I paid by the due by date in full (59th day), I shouldn't incur any interest and I could still spend on my card without additional charges this month - is that correct?Lots of garbage is said about Vanquis.
In this case the clue is in the OP:
OP spent £50.90 on 3rd December 2019. DD for £50.90 will be taken on 30th January 2021.
Their Vanquis statement simply indicates how much interest they would be charged if they only paid the minimum when it was due:
Next month's estimated interest: £2.90
All my other credit cards give a similar estimate for the following month's interest. Don't yours? Which ones do you use?0
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