MBNA - Interest charge but don't know why?

acm90

Hi, 

Wondering if someone could help explain why I have been charged interest on my latest statement. I tried to speak with the MBNA online chat but literally just got T&C copied to  than explaining where my interest had come from.

I thought that - Put stuff on card - receive statment with amount and due date - pay before due date - no interest charged - Don't pay by the statemetn due date, then you get charged intestest 

I'll give you a few details from my statement for the last three months. 

11th September Statement 
Previous balance: 31.59
Payments received: 31.59CR
New transactions, fees and charges: 484.53
My new balance: 484.53

Minimum payment: 25.00
Due:  6th October 2023
Payment of 484.53 made on 3rd October

(Purchases @ 24% APR = 484.53)


11th October Statement 
Previous balance: 484.53
Payments received: 1,071.92CR
New transactions, fees and charges: 1495.69
New balance: 908.30

Minimum payment: 25.00
Due:  6th November 2023
Payment of £68.30 sent on the 25th October 

(Purchases @ 24% APR = 68.30)
(Money Transfer @ 0% = 840.00 2/7/24) 



11th Novmber Statement 
Previous balance: 908.30
Payments received: 68.302CR 
New transactions, fees and charges: 493.79 (incl10.71 interest charged)
New balance: 1333.79


Minimum payment: 45.05
Due:  7th December  2023


(Purchases @ 24% APR = 493.79 - interest 10.71)
(Money Transfer @ 0% = 840.00 2/7/24) 

Fingerbobs

It looks like you didn't pay the October statement amount in full. Interest is only waived if the full statement balance is paid by the due date.

acm90

Fingerbobs said:

It looks like you didn't pay the October statement amount in full. Interest is only waived if the full statement balance is paid by the due date.

Ah so by full do you mean I should have paid the £908.30 even though £840 of this amount is 0% until June 24

Fingerbobs

acm90 said:

Fingerbobs said:

It looks like you didn't pay the October statement amount in full. Interest is only waived if the full statement balance is paid by the due date.

Ah so by full do you mean I should have paid the £908.30 even though £840 of this amount is 0% until June 24

Yes, the purchases start attracting interest as soon as they hit your account. That interest is only waived if the entire statement balance is cleared in full, even if a portion of that balance is on a 0% rate.

acm90

Fingerbobs said:

acm90 said:

Fingerbobs said:

It looks like you didn't pay the October statement amount in full. Interest is only waived if the full statement balance is paid by the due date.

Ah so by full do you mean I should have paid the £908.30 even though £840 of this amount is 0% until June 24

Yes, the purchases start attracting interest as soon as they hit your account. That interest is only waived if the entire statement balance is cleared in full, even if a portion of that balance is on a 0% rate.

Thanks for your help - much clearer explanation than I got from MBNA. 

Growingold

acm90 said:

Hi, 

Wondering if someone could help explain why I have been charged interest on my latest statement. I tried to speak with the MBNA online chat but literally just got T&C copied to  than explaining where my interest had come from.

I thought that - Put stuff on card - receive statment with amount and due date - pay before due date - no interest charged - Don't pay by the statemetn due date, then you get charged intestest 




11th October Statement 
Previous balance: 484.53
Payments received: 1,071.92CR
New transactions, fees and charges: 1495.69
New balance: 908.30

Minimum payment: 25.00
Due:  6th November 2023
Payment of £68.30 sent on the 25th October 

(Purchases @ 24% APR = 68.30)
(Money Transfer @ 0% = 840.00 2/7/24) 






(Purchases @ 24% APR = 493.79 - interest 10.71)
(Money Transfer @ 0% = 840.00 2/7/24) 

Looking at the October statement.  prev bal was £484.53  but said payments received £1071.92??? (how was this broken down).  New transactions £1495.69 which you said Money Transfer was £840 leaving £655.69.  What was the transfer fee?
Also With MBNA min payment is usually 1% of outstanding balance (including promotional rates) so how if the new balance was £908.30  (was that the actual statement balance produced?) how does it say min payment £25.  Should have been £90.83 (1% of outstanding Balance) so as not to incur interest.  You paid £68.30  so that is why I believe you were charged interest .  Not that you didn't pay off the MT as well else what would be the point in doing it.
This is what I think happened I'm sure other people will have their own thoughts to put forward.

eschaton

Growingold said:

acm90 said:

Hi, 

Wondering if someone could help explain why I have been charged interest on my latest statement. I tried to speak with the MBNA online chat but literally just got T&C copied to  than explaining where my interest had come from.

I thought that - Put stuff on card - receive statment with amount and due date - pay before due date - no interest charged - Don't pay by the statemetn due date, then you get charged intestest 




11th October Statement 
Previous balance: 484.53
Payments received: 1,071.92CR
New transactions, fees and charges: 1495.69
New balance: 908.30

Minimum payment: 25.00
Due:  6th November 2023
Payment of £68.30 sent on the 25th October 

(Purchases @ 24% APR = 68.30)
(Money Transfer @ 0% = 840.00 2/7/24) 






(Purchases @ 24% APR = 493.79 - interest 10.71)
(Money Transfer @ 0% = 840.00 2/7/24) 

Looking at the October statement.  prev bal was £484.53  but said payments received £1071.92??? (how was this broken down).  New transactions £1495.69 which you said Money Transfer was £840 leaving £655.69.  What was the transfer fee?
Also With MBNA min payment is usually 1% of outstanding balance (including promotional rates) so how if the new balance was £908.30  (was that the actual statement balance produced?) how does it say min payment £25.  Should have been £90.83 (1% of outstanding Balance) so as not to incur interest.  You paid £68.30  so that is why I believe you were charged interest .  Not that you didn't pay off the MT as well else what would be the point in doing it.
This is what I think happened I'm sure other people will have their own thoughts to put forward.

1% is £9.08. You’ve quoted 10%. 

MrFrugalFever

I believe keeping purchases separate from a Money Transfer or Balance Transfer is the best way to avoid this going forward, if you can.

Growingold

eschaton said:

Growingold said:

acm90 said:

Hi, 

Wondering if someone could help explain why I have been charged interest on my latest statement. I tried to speak with the MBNA online chat but literally just got T&C copied to  than explaining where my interest had come from.

I thought that - Put stuff on card - receive statment with amount and due date - pay before due date - no interest charged - Don't pay by the statemetn due date, then you get charged intestest 




11th October Statement 
Previous balance: 484.53
Payments received: 1,071.92CR
New transactions, fees and charges: 1495.69
New balance: 908.30

Minimum payment: 25.00
Due:  6th November 2023
Payment of £68.30 sent on the 25th October 

(Purchases @ 24% APR = 68.30)
(Money Transfer @ 0% = 840.00 2/7/24) 






(Purchases @ 24% APR = 493.79 - interest 10.71)
(Money Transfer @ 0% = 840.00 2/7/24) 

Looking at the October statement.  prev bal was £484.53  but said payments received £1071.92??? (how was this broken down).  New transactions £1495.69 which you said Money Transfer was £840 leaving £655.69.  What was the transfer fee?
Also With MBNA min payment is usually 1% of outstanding balance (including promotional rates) so how if the new balance was £908.30  (was that the actual statement balance produced?) how does it say min payment £25.  Should have been £90.83 (1% of outstanding Balance) so as not to incur interest.  You paid £68.30  so that is why I believe you were charged interest .  Not that you didn't pay off the MT as well else what would be the point in doing it.
This is what I think happened I'm sure other people will have their own thoughts to put forward.

1% is £9.08. You’ve quoted 10%. 

So sorry my mistake  

Superhoopza

Fingerbobs said:

acm90 said:

Fingerbobs said:

It looks like you didn't pay the October statement amount in full. Interest is only waived if the full statement balance is paid by the due date.

Ah so by full do you mean I should have paid the £908.30 even though £840 of this amount is 0% until June 24

Yes, the purchases start attracting interest as soon as they hit your account. That interest is only waived if the entire statement balance is cleared in full, even if a portion of that balance is on a 0% rate.

This is really useful information. I didn't know this and suspect others didn't either.

CliveOfIndia

Superhoop91 said:

Fingerbobs said:

acm90 said:

Fingerbobs said:

It looks like you didn't pay the October statement amount in full. Interest is only waived if the full statement balance is paid by the due date.

Ah so by full do you mean I should have paid the £908.30 even though £840 of this amount is 0% until June 24

Yes, the purchases start attracting interest as soon as they hit your account. That interest is only waived if the entire statement balance is cleared in full, even if a portion of that balance is on a 0% rate.

This is really useful information. I didn't know this and suspect others didn't either.

It's a common pitfall, and one which does catch a lot of people out - one reason why the advice on here is never to make purchases on a card that you've used for a Balance Transfer or Money Transfer.  As per the previous posts, the general rule is that you must clear the entire balance (whatever that balance consists of) every month in order to avoid interest.

I believe (though I'd need to double-check) that Barclays is one of the few that will "separate" spending from BT/MT amounts - allowing you to repay the "spending" each month and not pay interest, even if you've still got a BT on there at 0%.

BIG CAVEAT - if you want to explore this option, please do your own research and make sure you fully understand the T&Cs before going ahead.  As I say, I think this is how it works with Barclays, but please make sure you double-check.