John Lewis Credit Card Interest

Tiredoffools

Hi there, new here so please forgive me if I am repeating someone else.

I have a John Lewis (new day) card and use it to the tune of approximately £2k every month for all our expenses. I also pay in full every month. However, the past 2 months I underpaid by a few pounds as I am recovering from a large operation and guessed the amounts rather than check the exact amount. Last month I underpaid the total balance by £2.11 and this month by £1.19. I assumed the interest on those two amounts was so small - less than a penny - so I just didn't pay attention. HOWEVER, JL has charged me full interest on the total balance - £2k!! They have said this is industry standard now, but I am gobsmacked, is that true? You always paid interest on what you owed, not the entire balance (even if you'd paid 99.99% of it.) Can anyone tell me if all cards are like that now? When did it become industry standard? Thanks to you all in advance! 

spinningsheep

Yes this is true, and industry standard. If you don't pay your full balance "IN FULL" to the penny, any interest is charged on the entire statement balance. All in the T&Cs. 

WillPS

Also JL haven't charged you interest, NewDay have.

I'm not sure what the circumstances were which might have allowed you to be in a position to make payments but not know how much to pay - feels a little silly just guessing? If I were you I'd change tac, give them a call, explain your situation and see if there's any goodwill. Failing that cop it as a life lesson and/or set up a DD to clear the balance in full moving forwards.

eskbanker

Tiredoffools said:

HOWEVER, JL has charged me full interest on the total balance - £2k!! They have said this is industry standard now, but I am gobsmacked, is that true? You always paid interest on what you owed, not the entire balance (even if you'd paid 99.99% of it.)

You have only paid interest on what you owed.  The interest charge that you've paid will relate to the balance built up between the purchases and the statement date - once you made your partial repayments, these will have reduced the balance and at all times the daily interest calculation will be based on the actual balance that day.

cymruchris

Yes that's how it works - that's how it's always worked - and applies to all credit cards. Pay in full to the penny, and no interest. Pay a penny less than statement balance, and you pay interest accrued on all your transactions for that month. You might want to consider a direct debit in full each month to ensure you don't have any mishaps should you ever need to be out of touch with your day to day finances for a week or two for any reason. 

SuperAllyB

Other option if you really can't check is to make sure you err slightly on the high side.  At £2k spending per month you won't be long in using it up (in fact you'll probably have used that much between statement date and payment date

enthusiasticsaver

That is how it works.  Why don't you set up a direct debit to pay in full each month? 

DullGreyGuy

Haven't seen their app but every credit card I have if you go to make a payment gives you four options... 1. minimum payment 2. statement balance 3. total balance or 4. other amount. Not sure how you are getting to be a couple of quid under, you just select option two and make the payment. Safer still is a DD for the full balance. 

As others say, your debt incurs daily interest, if you pay every statement in full then the interest is waived but as soon as you are a fraction under then the interest will stand. 

They are in the right but assuming you've otherwise been a good payer/customer it's a little surprising they didnt waive the interest as a gesture of goodwill.