Interest Charge Confusion

curlymam

Hi everyone, I was just looking for a bit of clarity on imonthly nterest charges.  My husband is currently abroad and before he went he opened one of those credit cards with no exchange rate fees.  His plan was just to pay it all off once he's back and no longer using it, but he's just worked out his statement will be produced whilst he's out there.  
In order to avoid paying 24% interest or whatever the APR is, do I need to clear the balance before the statement date?  Or do you get the month after the statement to pay it off before you start paying interest on that balance?  Sorry if this is a stupid question but we've always just had promotional rate 0% interest cards before.
Thanks. 

[Deleted User]

As long as all transactions are purchases, the full balance just need to be paid by the due date, which is shown on your next statement.

If there are cash transactions, you'll be charged interest on those in most (but not all) cases on a daily basis until cleared.

Ebe_Scrooge

You just need to clear the balance by the "Payment Due" date.  This is usually about 3 weeks or so after the statement is produced.  So, say the statement pops through your letterbox (or into your email inbox!) on 30th May, you should see that the "Payment Due" date will be roughly 21st June.  That being the case, as long as you pay the full balance as detailed on the statement (which may be different to the current real-time balance if you check your account online) by the "Payment Due" date, you'll have no interest to pay.

The only interest you may be charged might be if your husband makes any cash withdrawals on the card - most cards will still charge interest on cash withdrawals, but a few (Barclaycard is one, I think?) won't charge as long as it's paid when the statement due date arrives.  But even if you do get charged interest on a cash withdrawal, it won't be a lot, and is still usually the cheapest way of withdrawing cash abroad.

But yep, in a nutshell, wait until the statement arrives, pay the full statement balance and you'll be fine.

As a slight aside, this is a perfect example of why a Direct Debit is so handy.  Set up a DD to pay the full amount (in the case of an ordinary interest-bearing card) or minimum payment (in the case of a 0% promotional card), then you never need to worry.  If you're abroad with no convenient access to online banking, or if you just forget, it won't matter - the payments will still be taken care of for you.

curlymam

Fantastic, thank you both for your help.

Gerry1

Ebe_Scrooge said:

The only interest you may be charged might be if your husband makes any cash withdrawals on the card - most cards will still charge interest on cash withdrawals, but a few (Barclaycard is one, I think?) won't charge as long as it's paid when the statement due date arrives.

That's the Barclays Rewards card.  0.25% cashback on purchases as well, so it's a no-brainer for overseas use.