Interest charge on credit card

vic_msn

I topped up an online prepaid card for £20.00 using my credit card on July 30th this year.
I didn't realise I was going to be charged a cash withdrawal charge then.
I usually don't look at my credit card statement as I have a direct debit setup to pay off each months balance in full.
I was browsing my credit card transactions on my mobile and saw an INTEREST charge for £0.22 on Aug 18th (card statement date).
I then looked at the previous months statement and there was a small note saying the interest for the current period is £0.22 (@ 1.809% monthly).
I quickly realised this would be for the £20.00 online transaction.

I then contacted card support who confirmed the same,
I then went on to ask them if the charges have been collected in full, as I have paid off the full statement balance(there was a direct debit collection on Aug 16th for full statement balance). Also there was another refund(CR) of £0.85 credited sometime last week for another unrelated transaction (original transaction was in the first week of August)
They said even though direct debit has been collected that is particular transaction for £20 is still not showing as paid off.
So clearly between this refund and my direct debit payment the balance has to be covered in full?
I asked them how much should I pay now to close that transaction but they were unable to give me any answer.

I did some calculation myself and arrived at £0.47 as the total interest till date(39 days) on the £20 transaction and paid off the total current remaining balance plus £0.47.
Do you think this payment would cover the interest fees?
I am quite annoyed at the bank for not giving me enough information.

Thanks

vic_msn

this was the reply I got from them

Not yet. Trailing interest will still be charged until the balance on this cash transaction has been fully paid off. I can see here that the current balance on your cash transaction is still showing £20.22.

Payments made to a Credit Card will pay off balances based on the type of amount in the following order:

1.Interest on Cash
2.Fee on Cash
3.Cash
4.Interest on purchases and non-promotional rate Balance Transfer
5.Fee on purchases and non-promotional rate Balance Transfer
6.Purchases and non-promotional rate Balance Transfer
7.Interest on promotional rate Balance Transfer
8.Fee on promotional rate Balance Transfer
9.Promotional rate Balance Transfer
10.Promotional rate purchases
11.Insurance

bank will always pay off the Credit Plan which is earning the highest interest at the time of the payment being received

How come the cash balance is £20.22? at best it should be £0.22 ?

Ebe_Scrooge

I may be wrong, but here's my understanding of what's happened.

30th July you made the - what was classed as - cash withdrawal.

August 16th, DD collected full statement amount.

If the 16th of the month is your DD date, that would imply that the statement is generated approximately 25th of the previous month (you'll need to check your statements to get exact dates, but it's usually roughly about 3 weeks or so between the statement being generated and payment being due).

That being the case, I suspect that the cash withdrawal hadn't hit the statement generated on 25th July, and which you paid in full on 16th August.  So it will have been accruing interest from 30th July.  You should see it on the statement generated on 25th (or whenever) of August, which you'll pay in full on 16th September.

If you then (after August 16th) made an interim payment for £20.47, that should have been allocated to the cash transaction.  So yes, it should cover it (give or take a few pence, assuming your calculations were correct).  Did you account for the cash withdrawal fee, as well as the cash itself and the interest?

vic_msn

July's statement date was on the 20th and the August statement date was 18th.

The DD due to be collected this month for the August statement included the £0.22 interest charge.
But £0.22 figure was only the accumulated charge till the statement date.
It would still be accruing interest (part of £20.22 if not full amount)?
So hadn't I noticed this charge would still be paying interest for the original £20 even after September's statement gets generated?
If I had left it to the system to autocollect it when would I have paid it off?

Thanks

y3sitsm3

vic_msn said:

July's statement date was on the 20th and the August statement date was 18th.

The DD due to be collected this month for the August statement included the £0.22 interest charge.
But £0.22 figure was only the accumulated charge till the statement date.
It would still be accruing interest (part of £20.22 if not full amount)?
So hadn't I noticed this charge would still be paying interest for the original £20 even after September's statement gets generated?
If I had left it to the system to autocollect it when would I have paid it off?

Thanks

The DD collected this month was for July's statement.

If you had left it, it would eventually be paid off, yes.

born_again

You will see trailing interest for 3 months.

Cash advance incurs interest from day one. So you have the interest from date of payment till the date the statement is produced. This shows on that statement. When it is paid in full (amount on statement) you then have interest from the date the statement is produced to the date the DD is collected. Which will shown on the next statement, rinse & repeat for next month.