Being charged interest on interest free card

parkerusm

I took out a balance transfer credit card. I am still in the interest free period.  I spent some money on it in one month, and repaid that amount and much more. However I'm still being charged interest.  I thought if I paid back the purchase amount it would go back to being interest free but it hasn't. Doesn't anyone know why? Thanks. 

Brie

Because it's interest free for the BT only.  And because you are obviously not clearing the balance every month (because it's a 0% BT) in keeping with the T&Cs interest is charged on any purchase you make from the day of the purchase until both the purchase and all the interest is cleared.  

So you do a BT and all is fine.  Then you get your statement on 1 April and it's all ok.  Minimum payment DD is set up for 15th April and that's fine.  Then on 22nd April you make a purchase and you start being charged interest from that date as your payment on 15th didn't clear the entire balance.  On 25th April you pay off the amount of the purchase but the interest is still being charged.  Statement on 1 May shows BT at 0% and interest that has been charged.  Your minimum DD on 15th May clears the interest that you were charged and a bit more.  But you are still paying interest on the interest possibly until June or even July.  

Double check the T&Cs but I believe legally they have to use any payment made on the one attracting the most interest.  It's possible that because the purchase hasn't been recorded on a statement that they don't consider that as interest bearing until it's on the statement which means that the sizeable payment you made on 25th April actually cleared some of the BT.  Frankly I think that the T&Cs are written to purposely make it difficult to know precisely how the interest is going to be charged and when.

born_again

parkerusm said:

I took out a balance transfer credit card. I am still in the interest free period.  I spent some money on it in one month, and repaid that amount and much more. However I'm still being charged interest.  I thought if I paid back the purchase amount it would go back to being interest free but it hasn't. Doesn't anyone know why? Thanks. 

Let me guess.
You paid for the spending before you received the statement that the transaction was on?

Any payments before any spending is on the next statement go to the previous statement balance.

parkerusm

Thanks for replies,  got my dates wrong, it'll be fine now I think. Only £3.35 interest but it confused me!