Interest

molerat

amhanna said:

These amounts and interest appear at the bottom of the last page on my statement the overview shows 3 sets of interest And what is left on the full balance and it simply said other which as I have said in my explanation the rep stated was late payments  of which I had 3 as I was in hospital seriously ill in 2019 so not pestering the ombudsman is not out of the question as I would like a more definitive answer from Tesco

You also said that the balance of this "Other" was increasing.  The balance cannot increase unless there is a corresponding debit amount in the transactions section.  Any interest charged will be taken as part of the monthly payment.   How are you making the monthly payment and what are you paying - minimum or a fixed amount, direct debit or manual payment ? Are you on a payment arrangement ?

amhanna

Monthly and overpaying

amhanna

No payment arrangements internet banking manually

SuperAllyB

amhanna said:

I have tried the interest on the other amount is the same as the balance transfer as I said before it was explained they are the default charges I also asked why I'd there is an overpayment can't some of it be out towards other as it is charged at the same interest as balance transfers which is the highest interest again Tesco are as clear as mud

If the balance transfer and the "other" are both at the same interest rate then it doesn't make any difference financially which balance your payments are allocated to.

SuperAllyB

amhanna said:

Brie I would have assumed interest was only charged on the remaining balance after a payment was made as you said seems very strange

Interest will be charged daily on the full balance from the last statement date until the payment date, then the remaining balance between the payment date and the new statement date.

Brie

Ebe_Scrooge said:

Brie said:

Ebe_Scrooge said:

Late payments from a few years ago will not, in and of themselves, incur interest.  But the bottom line, for any credit card, is that if you do not clear the balance in full, you'll be charged interest on the full balance (not just the portion remaining).  So if your statement balance is £1000 and you pay £999, you'll be charged interest on £1000 for that month.  Standard practice for any credit card.

I don't know any card that works this way and in fact thought it was against industry practice.

No, it's absolutely standard for all credit cards.

Maybe on yours.  But not on my Barclaycard, MBNA, Santander or M&S card.  Believe me I have checked this.

Yes if I haven't cleared the amount purchased I will be charged interest from the purchase date but then only to the date as payment is made, and then a lesser amount is calculated until the next payment.  

peter3hg

Brie said:

Ebe_Scrooge said:

Brie said:

Ebe_Scrooge said:

Late payments from a few years ago will not, in and of themselves, incur interest.  But the bottom line, for any credit card, is that if you do not clear the balance in full, you'll be charged interest on the full balance (not just the portion remaining).  So if your statement balance is £1000 and you pay £999, you'll be charged interest on £1000 for that month.  Standard practice for any credit card.

I don't know any card that works this way and in fact thought it was against industry practice.

No, it's absolutely standard for all credit cards.

Maybe on yours.  But not on my Barclaycard, MBNA, Santander or M&S card.  Believe me I have checked this.

Yes if I haven't cleared the amount purchased I will be charged interest from the purchase date but then only to the date as payment is made, and then a lesser amount is calculated until the next payment.  

This is the relevant section of the MBNA terms that confirms that interest is only waived where the full balance is paid.

"We do not charge interest on purchases made during your latest statement period if you

pay off your full balance (including any balance transfers and money transfers) by the payment due date and you also paid your previous month's balance in full by the due date."

Can you quote where your terms say otherwise?

Brie

peter3hg said:

Brie said:

Yes if I haven't cleared the amount purchased I will be charged interest from the purchase date but then only to the date as payment is made, and then a lesser amount is calculated until the next payment.  

This is the relevant section of the MBNA terms that confirms that interest is only waived where the full balance is paid.

"We do not charge interest on purchases made during your latest statement period if you

pay off your full balance (including any balance transfers and money transfers) by the payment due date and you also paid your previous month's balance in full by the due date."

Can you quote where your terms say otherwise?

What you have quoted is the exception which follows on from this:

"We calculate interest daily based on the total amount you owe.  We add together all the daily interest amounts in each statement period and add the total to your balance on your statement date."

so if I have exceeded the interest free period daily interest is calculated.  If I owe £1k it's calculated on that but if I pay £500 then any successive days the daily interest is calculated on that not the £1k I owed previously.

Ebe_Scrooge

OK, we're splitting hairs here.  It's correct that interest is calculated daily.  And interest is waived if you clear the full balance.

Keeping it simple, assume your statement runs from 1st to 30th of the month.  On the 1st, you have a balance of £1000 (and make no other purchases).  Statement is produced on the 30th, payment due by the 15th of the following month.  Statement shows £1000 owing.

If you pay £1000 any time between 1st and 15th, no interest.is charged.

Pay £900 on the 1st, you'll be charged 30 days interest on £1000. (That's kind of the scenario I meant when I said earlier "So if your statement balance is £1000 and you pay £999, you'll be charged interest on £1000 for that month")

Pay £900 on the 14th, you'll be charged 44 days interest on £1000 (split across 2 statements).

(I've assumed all months have 30 days here, just for clarity of explanation).

Brie

@Ebe_Scrooge

Ultimately I think we are saying similar things but in different ways.

I assume that when you give the days when payments are being made you mean on the second month. 

But if you owe £1000 and pay £900 only on day 31 you will be charged interest on the initial £1000 for the first 30 days since purchase and then only £100 that remains on subsequent days.

That means with the next statement the total owing is £100 + 30 days interest on £1000 & 15 days interest on £100 only. 

And interest will continue to be charged on this for possibly 2 more months as there is no longer any 0% possible.

Hopefully you agree??