How can they estimate that?

Money_and_Travel

Just received this month's statement, and it says my estimated interest for next month is £2-59.

How do they come by that estimate, given I've never paid a penny in interest?

Did they just pluck that figure from thin air?

DE_612183

need more context - which provider?

It could be it's an estimate if you do not clear an outstanding balance in full at the end of the month.

Whats the current balance on your card, when was the last transaction?

Nasqueron

Did you do any cash transactions (even if down to a mistaken MCC on a retailer) or not pay off the card in full by the due date? Do any previous statements show this?

molerat

They have to give an estimate of the interest you could pay if you only pay the minimum and make no more purchases, them's the rules they have to play by and will calculate it within guidelines set out by the regulator.

mebu60

If you look back at previous statements you will see it is on those too. Is irrelevant if you pay off in full each month. 

Money_and_Travel

DE_612183 said:

need more context - which provider?

It could be it's an estimate if you do not clear an outstanding balance in full at the end of the month.

Whats the current balance on your card, when was the last transaction?

Barclaycard.

I always pay the balance in full. Indeed, I pay as soon as the transaction clears.

The current balance is zero.

Last transaction was 8th February, and it's already been paid off.

Money_and_Travel

Nasqueron said:

Did you do any cash transactions (even if down to a mistaken MCC on a retailer) or not pay off the card in full by the due date? Do any previous statements show this?

No to all of them.

EDIT: Correction. Some previous statements do show it, but not for the last few statements.

Never noticed it before.

etienneg

Money_and_Travel said:

I always pay the balance in full. Indeed, I pay as soon as the transaction clears.

Why do you bother with a credit card if you are going to pay each transaction as it 'clears'? It would be easier for you just to pay by debit card.

Paying off a month's worth of transactions all together once the statement has been issued is fine. But there's no benefit in paying more regularly. Hence my question above.

DullGreyGuy

etienneg said:

Money_and_Travel said:

I always pay the balance in full. Indeed, I pay as soon as the transaction clears.

Why do you bother with a credit card if you are going to pay each transaction as it 'clears'? It would be easier for you just to pay by debit card.

Paying off a month's worth of transactions all together once the statement has been issued is fine. But there's no benefit in paying more regularly. Hence my question above.

Not only no benefit, you are losing the benefit of the interest free credit and some card issuers limit the number of repayments you can make a month so process may break if you switch cards or have a month of particularly frequent use

CliveOfIndia

DullGreyGuy said:

etienneg said:

Money_and_Travel said:

I always pay the balance in full. Indeed, I pay as soon as the transaction clears.

Why do you bother with a credit card if you are going to pay each transaction as it 'clears'? It would be easier for you just to pay by debit card.

Paying off a month's worth of transactions all together once the statement has been issued is fine. But there's no benefit in paying more regularly. Hence my question above.

Not only no benefit, you are losing the benefit of the interest free credit and some card issuers limit the number of repayments you can make a month so process may break if you switch cards or have a month of particularly frequent use

You are also missing out on the benefit of building up a solid credit history.