Martin Lewis money show last night

castle96

"£1000 balance on card, pay off £999... interest is paid on £1000"     IS that really true??

Ebe_Scrooge

Yes, and it always has been.  Unless you pay off the full balance, you'll pay interest on the full balance, not just the remaining amount.

RobM99

It's true - and the reason why credit cards should be paid IN FULL!

mazzetti

Not only will you pay interest on the full balance you will pay interest calculated for each item back to the purchase date not the statement date

D3xt3r5L4b

Yes. I guess you’re new to credit cards?

[Deleted User]

I was a little surprised he didn't suggest the person's main banker (i.e. where their income goes into) for their first credit card. Especially before the subprime route!

castle96

Had card(s) for 45 years. Always paid off in full. Just didn't realise this. What a con !

bradders1983

castle96 said:

Had card(s) for 45 years. Always paid off in full. Just didn't realise this. What a con !

Not really a con when that is how credit cards work 🤷‍♂️

jonesMUFCforever

castle96 said:

Had card(s) for 45 years. Always paid off in full. Just didn't realise this. What a con !

How is a free 'up to 56 days' interest free time period a con if you time your purchase right?

Gerry1

jonesMUFCforever said:

castle96 said:

Had card(s) for 45 years. Always paid off in full. Just didn't realise this. What a con !

How is a free 'up to 56 days' interest free time period a con if you time your purchase right?

If you get 25 days to pay and you buy something just after a statement date then it's 31 days + 25 days = 56 days.

zagfles

castle96 said:

"£1000 balance on card, pay off £999... interest is paid on £1000"     IS that really true??

Sort of. You only pay interest on what you owe, so say you made a purchase of £1000 on 10 July, got the statement on 12 July, and paid off £999 on 14 July. You'd pay interest on £1000 for 4 days, 10 July to 14 July, as £1000 was owed for that period. Afterwards you'd only pay interest on £1 till you pay it off.

This is the normal way credit cards work. But there is a specific exemption that if you pay the statement balance IN FULL then you don't get charged any interest. So if instead, you'd paid £1000 on 14 July, you would get charged no interest for the 4 days when you owed £1000.