Interest charged on credit card statement for new purchase??

Maria61

I have an M&S credit card with an existing balance of £600 - last month I used it to make another purchase for £2000 - just received my statement and have been charged interest for the £2000 purchase - is it correct that there is no interest free period on new purchases when I already have a balance owing???? 

Maria61

Just to say the original balance owing of £600 is not a balance or money transfer amount

MorningcoffeeIV

Maria61 said:

 is it correct that there is no interest free period on new purchases when I already have a balance owing???? 

Yes, that's correct.

You need to clear your balance in full for interest to be waived on the cast majority of cards.

CliveOfIndia

Maria61 said:

is it correct that there is no interest free period on new purchases when I already have a balance owing???? 

Correct.  Aside from promotional offers (0% on purchases for 12 months, for example), there is technically no such thing as an interest free period.  On any standard card, interest on every transaction is accrued on a daily basis, from the transaction date until it is repaid.

If you pay the full statement balance then the accrued interest is waived.  Pay anything less than the full balance and all the accrued interest becomes payable.

Olinda99

not sure I understand - are you saying you made the £2000 purchase and it showed on your next statement as a new transaction and interest was also added?

If so this is wrong you have until the payment date to clear the balance and not incur interest charges

'clear the balance' means paying £2500 unless the MT part is treated separately in which case it is £2000

Maria61

I thought that too but my transaction date was 2nd oct and on my statement dated 31st oct I have been charged interest from 2nd October - I did not realise I would be charged interest I thought I would incur interest if I did not pay off the balance by my November statement - seemingly because I already had an amount owing of £600 I will be charged interest on any new purchases - it has put me off using my card in the future

Brie

Maria61 said:

I have an M&S credit card with an existing balance of £600 - last month I used it to make another purchase for £2000 - just received my statement and have been charged interest for the £2000 purchase - is it correct that there is no interest free period on new purchases when I already have a balance owing???? 

So in September you spent £600+ and paid a bit of that leaving £600 owing at the beginning of the next statement period.

You then spent £2000 which accrues interest from the date that was spent rather than allowing you any interest free period.  

Because this is M&S and they seem to be more understanding than some card providers you could try going onto their online chat function (or ringing if you have the time) and explain that you didn't understand and would they be willing to waive the interest?  This is working on the assumption you have already cleared the £600 and are able to clear the rest by the next payment date.  Mention that this has put you off using their card in future unless they are willing to be helpful.  

MorningcoffeeIV

There will be some trailing interest to pay next month.

But once you've cleared two consecutive statements in full, you'll be back to having the interest waived if you continue to clear in full.

Don't spite your future self just because of a minor error.

FarmGirl78

You may also be charged interest in your £2k purchase of that was in essence a "cash" purchase, such as travellers cheques, foreign currency or gambling stakes. In these instances the credit card company will treat it as though you've drawn physical cash out, and you'll pay interest from the date of the transaction until its paid off in full.

molerat

Olinda99 said:

not sure I understand - are you saying you made the £2000 purchase and it showed on your next statement as a new transaction and interest was also added?

If so this is wrong you have until the payment date to clear the balance and not incur interest charges

'clear the balance' means paying £2500 unless the MT part is treated separately in which case it is £2000

Only if the card was not already carrying a balance.  The previous statement balance had not been paid off by the due date and not by the new statement date so interest was legitimately due on that new purchase from purchase date to statement date.

molerat

Maria61 said:

I thought that too but my transaction date was 2nd oct and on my statement dated 31st oct I have been charged interest from 2nd October - I did not realise I would be charged interest I thought I would incur interest if I did not pay off the balance by my November statement - seemingly because I already had an amount owing of £600 I will be charged interest on any new purchases - it has put me off using my card in the future

Pay each statement off in full, as shouted by Martin Lewis every time he talks about credit cards, by the due date and you will never incur interest, it is as simple as that.  Even if you are 1p short in paying off that balance you will incur interest on future purchases.  You will also be charged interest on whatever part you did pay off from purchase date until it was paid.