Is this really right - interest charge?

Debbie_Hobdell

I'm a little curious re the amount of interest I've been charged by Virgin this month.

My balance was £7730 in mid-May and required a minimum payment of £100 to reach my account by 14th June.

I made a payment of £7625 which was credited to my account on 1st June, and after Virgin had refunded some money as previously promised, also on 1st June, I was left with a balance of £16.97.

I knew I would have to pay some interest (currently 14.9% pa) but I was shocked to discover today that the amount charged was £41.12; I know it applies to the 2 weeks that the £7000+ was on my card, but that still seems incredibly high.

I wondered if anyone here would be able to confirm independently (based on their own knowledge or experience) if this really is likely to be correct.

YorkshireBoy

Debbie_Hobdell wrote:

I wondered if anyone here would be able to confirm independently (based on their own knowledge or experience) if this really is likely to be correct.

As no-one else has been able to help you yet, I'll have a go based on my interpretation of the T & C's...

£7,000 x 1.2408% = £86.86/month (31 days)

Interest applied for 14 days = £86.86/31*14 = £39.22

No reliance should be placed on the above - it's just to give you a rough idea if the interest amount you quoted is "somewhere near".

If you're still unsure, give them a ring and ask them to explain it (I think it's even an 0800 freephone number!).

dag_2

I'm going to have an attempt too.

You haven't said when your statement date is - please confirm this. However, your statement date can't be later than the 18th of the month, otherwise you wouldn't be posting about it now. Any earlier than the 18th means your payment due date in June is getting very close to overlapping the June statement. So I'll assume it's the 18th.

Your interest rate is 14.9% APR - I make that out to be 0.03806% per day, assuming that interest is accrued and compounded on a daily basis.

Your balance was £7730 from 18th May to 1st June - that's 14 days, so interest will be £41.29.

Your balance from 1st June to 18th June was £16.97 - plus the interest that you have accrued but which hasn't yet been charged to your account of £41.29 - so, for the purposes of interest calculation, your balance would have been £58.26. 17 days interest on this would have been £0.42

So your total interest added on your June statement would have been £41.71

Like I say, I've made assumptions. If you can fill in the missing info, we should be able to get a more accurate figure.

Debbie_Hobdell

Thanks Yorkshireboy & Dag!

I'm no good at maths, hence the posting. My statement date is 15th of each month, so that makes your estimate pretty accurate.

Having had low interest rates for ages I've forgotten what "normal" rates can be like, unfortunately I couldn't move it to another low-interest card as soon as the reduced rate stopped.

Just as well I'll have paid all of it off before they increase my interest rate to 24.9% in July!!!