Surely this isn't right - interest charges

kore_2

Hi all,

I've got a credit card that I pay off in full and on time each month.

Last month I stupidly didn't turn over the statement page so didn't pay off the full balance. I paid £20 less (rounded up for ease).

I've just got this months statement and been charged over £4 interest, which seemed excessive considering that I only owed £20. I worked it out based on their rates and the interest on £20 would be 35p. Of course, I accept I have to pay interest on the money I owe and would pay it.

I called my credit card company and was told that I've been charged interest on the full balance from last month, not just the £20 I owed. This includes the money I've already paid them so no longer owe them. He also said that this is standard for other credit card companies.

I know it's not huge amounts, I just can't believe it's correct that they can charge me interest on money that I no longer owe them.

Can someone please tell me if this is right? If not, what can I do about it?

CLAPTON

The way it works is like this:

Interest is calculated daily from the day that you spend on the card and is charged until you actually pay the money off.

As a special arrangement however, if and only if you pay the full amount each month they cancel the interest and charge you nothing.
Hence the claim of 'up to 50 (or whatever) days free credit'.

But if you don't pay the full amount, even if it’s by a small amount you then get charged as I described above.
Also if you spend more money during the next month you will be charged interest on that as you have now lost the ‘no interest ‘ feature.
This also means that even if you now pay in full, you will get a small interest charge next month which will be the interest incurred between the statement date and the day you pay.
Only when the balance is zero for two consecutive months will you go back to zero interest.
It is how all credit cards work.