When Does Interest Stop if I start paying in Full

Superhoopza

I've asked on the providers live chat and they said I won't incur any more interest charges but they've shown me before that some of them don't know what they are talking about so here's the scenario.

For a while I've been carrying a balance on a card and not paying in full so incurring interest.
The due date to clear my December statement balance was 4th Jan, I cleared the statement amount in full on 9th Jan. I naturally incurred interest then on the 12th Jan
Then my Jan statement came out on the 12th. I will be clearing it through Direct Debit by my Feb due date. My question is will I incur interest charges in Feb or will I have to clear Feb's balance by it's due date (i.e. two full statement clearances by their due dates) to not incur any more interest charges.

Thanks

Nasqueron

There is always trailing interest from the previous month or so, it's better to assume two months if you start paying in full every month

Superhoopza

Nasqueron said:

There is always trailing interest from the previous month or so, it's better to assume two months if you start paying in full every month

Thank You!

Superhoopza

So interest is generally charged a month in arrears then?

I've got a chat transcript from the provider saying if I pay my Jan balance in full in Feb, I won't incur interest charges in Feb. I'll use that to argue if I do incur charges but they probably won't care that their agents don't understand how things work in their primary business.

Fingerbobs

I'm puzzled by the dates things happened, but it looks like the first statement you will pay in full by the due date will be January's statement? So yes there will be additional trailing interest on your February statement. I think! 

Superhoopza

Fingerbobs said:

I'm puzzled by the dates things happened, but it looks like the first statement you will pay in full by the due date will be January's statement? So yes there will be additional trailing interest on your February statement. I think! 

I understood your first post, you're understanding was correct. Not sure which dates you're puzzled by? Maybe I can clarify better below:

December 12th Statement: Due Date 4th Jan, Paid in full on 9th Jan
January 12th Statement: Due Date 4th Feb, will be paid in full by 1st Feb

I suppose the two questions are, will they count me paying my December balance before the next statement date but after the due date as paying it in full? If not, will they want two full statements paid BY THE DUE date, before interest stops?

CliveOfIndia

Superhoopza said:

Fingerbobs said:

I'm puzzled by the dates things happened, but it looks like the first statement you will pay in full by the due date will be January's statement? So yes there will be additional trailing interest on your February statement. I think! 

I understood your first post, you're understanding was correct. Not sure which dates you're puzzled by? Maybe I can clarify better below:

December 12th Statement: Due Date 4th Jan, Paid in full on 9th Jan
January 12th Statement: Due Date 4th Feb, will be paid in full by 1st Feb

I suppose the two questions are, will they count me paying my December balance before the next statement date but after the due date as paying it in full? If not, will they want two full statements paid BY THE DUE date, before interest stops?

So for the statement generated on 12th Dec you paid it in full, but late.  So you'll have been charged interest on the balance since you didn't clear it by the due date - plus, presumably you'll have got a late payment fee.

You then paid January's statement in full, but early?

In answer to your question, if you've been carrying a balance for a few months then yes, you need to clear the next two statements in full by the due date to take account of trailing interest.

Superhoopza

CliveOfIndia said:

Superhoopza said:

Fingerbobs said:

I'm puzzled by the dates things happened, but it looks like the first statement you will pay in full by the due date will be January's statement? So yes there will be additional trailing interest on your February statement. I think! 

I understood your first post, you're understanding was correct. Not sure which dates you're puzzled by? Maybe I can clarify better below:

December 12th Statement: Due Date 4th Jan, Paid in full on 9th Jan
January 12th Statement: Due Date 4th Feb, will be paid in full by 1st Feb

I suppose the two questions are, will they count me paying my December balance before the next statement date but after the due date as paying it in full? If not, will they want two full statements paid BY THE DUE date, before interest stops?

So for the statement generated on 12th Dec you paid it in full, but late.  So you'll have been charged interest on the balance since you didn't clear it by the due date - plus, presumably you'll have got a late payment fee.

You then paid January's statement in full, but early?

In answer to your question, if you've been carrying a balance for a few months then yes, you need to clear the next two statements in full by the due date to take account of trailing interest.

No I made a minimum payment for December's by the due date, then made another payment to clear it in full after.

Jan's payment is coming out by DD.

Thanks, ok I'll expect interest for the last time on that card next month (but will try and argue it for the points mentioned above).

CliveOfIndia

Superhoopza said:

No I made a minimum payment for December's by the due date, then made another payment to clear it in full after.

So you'll be (correctly) charged interest on December's balance since you didn't clear it in full by the due date.

Superhoopza said:

Jan's payment is coming out by DD.

If the DD is set up for the full statement balance then that's good.

Superhoopza said:

I'll expect interest for the last time on that card next month

Correct - you'll have a bit of trailing interest on February's statement, but as long as you clear that one in full by the due date you'll be in the clear from there on.

Superhoopza said:

 (but will try and argue it for the points mentioned above).

I'm not sure what the basis of your argument would be.  From what you've described, they've charged you interest correctly, exactly the same as every other card in the UK would have done in the same scenario, and in line with their T&Cs.  I can't see that they've done anything sneaky or underhand.

Superhoopza

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Superhoopza said:

 (but will try and argue it for the points mentioned above).

I'm not sure what the basis of your argument would be.  From what you've described, they've charged you interest correctly, exactly the same as every other card in the UK would have done in the same scenario, and in line with their T&Cs.  I can't see that they've done anything sneaky or underhand.

It goes back to my point above where I have a chat transcript with them asking if I will be charged interest in February, should I make my full balance payment on 01/02/2024 to which they said a definitive no. It's them getting it wrong more than likely but I'll challenge it if its a decent amount. They'll probably say sorry for the misunderstanding and then refer me to my credit agreement. 

CliveOfIndia

Superhoopza said:

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It goes back to my point above where I have a chat transcript with them asking if I will be charged interest in February, should I make my full balance payment on 01/02/2024 to which they said a definitive no. It's them getting it wrong more than likely but I'll challenge it if its a decent amount. They'll probably say sorry for the misunderstanding and then refer me to my credit agreement. 

You have to appreciate that most Customer Service reps, whilst in the main doing a great job, are not qualified accountants who understand every little nuance of how credit card interest works.  Trailing interest, in particular, can be a bit of a tricky one to get your head around.

Of course you could try, and you may very well get the trailing interest waived as a good-will gesture.  Having said that, it's going to be a very small amount anyway - something in the order of a few pence to a couple of quid, depending on the balance you were carrying before clearing it.