Halifax Credit Card - Interest Charges

kazze12

Ok, help me with this question!

I have several credit cards, barely used and if they are they are paid in full when the statement is issued so I do not pay interest. It was my understanding that:

You buy something

You get a statement showing your purchases weeks / days later

You pay in full before the due date

You don’t pay interest (which would be added on the second statement if you didn’t clear the balance)

A Halifax CC currently had a Money Transfer on taken earlier this year and was well within the promotional period. On the latest statement I owned £600 (brought down from £3500 in February) on the Money Transfer, promotional rate ends February 2026!

Two weeks earlier I spent £150 on the card on in-store shop purchases, it was my intention to clear the balance in full on this months statement, so that was for the £600 left for the Money Transfer and the £150 for the most recent purchases.

This month’s statement I was charged £1.10 in interest and call me silly but why??? After speaking to the bank via messaging them on the app they told me interest was applied from the day of purchase, hence why interest was charged on the statement this month, but why when I’ve not had a chance to even clear the balance in full, and this is the first statement with these in-store purchases on! 

I’ve never experienced this before on other credit cards and always had a statement after a purchase, paid in full and bingo no interest was charged. And I’ve scrolled through previous statements and never been charged interest on a statement when the purchases are new!

Now, I know £1.10 is nothing in the grand scheme of things and the bank reversed it. However, I felt I was right and so raised a complaint, the bank gave me £30 but still insist the interest charged was correct. 

la531983

You are  £30 up, I would give this one up.

Golden rule - NEVER spend on a card that has a balance transfer/cash transfer promo balance on it. Ever. Ever ever.

Move on.

CliveOfIndia

It's because you didn't clear the balance in full.  As above, this is why the golden rule is never to make purchases on a card you've used for a BT/MT promotion.

Because you didn't clear the full balance (including the promotion portion), interest on the purchases becomes payable, just the same as if you've only made purchases but don't clear the full balance.

There are one or two cards (Barclaycard Rewards being one, I think) which do "separate out" spending from promotional deals - meaning you can just clear the spending portion and not pay interest.  But these are very much in the minority - for almost all cards the standard rule of "clear the full balance or pay interest" is applied.

kazze12

CliveOfIndia said:

It's because you didn't clear the balance in full.  As above, this is why the golden rule is never to make purchases on a card you've used for a BT/MT promotion.

Because you didn't clear the full balance (including the promotion portion), interest on the purchases becomes payable, just the same as if you've only made purchases but don't clear the full balance.

There are one or two cards (Barclaycard Rewards being one, I think) which do "separate out" spending from promotional deals - meaning you can just clear the spending portion and not pay interest.  But these are very much in the minority - for almost all cards the standard rule of "clear the full balance or pay interest" is applied.

Thank you so much for your detailed response, it is really helpful and makes sense. The only reason the card was used was because it was a new card (old one was expiring) and I had to activate it with chip and pin to make it contactless, otherwise I wouldn’t have used it! 

Thanks again for your help, I’ve learnt something new!

kazze12

la531983 said:

You are  £30 up, I would give this one up.

Golden rule - NEVER spend on a card that has a balance transfer/cash transfer promo balance on it. Ever. Ever ever.

Move on.

Lesson learned! 👍

gt94sss2

kazze12 said:

CliveOfIndia said:

It's because you didn't clear the balance in full.  As above, this is why the golden rule is never to make purchases on a card you've used for a BT/MT promotion.

Because you didn't clear the full balance (including the promotion portion), interest on the purchases becomes payable, just the same as if you've only made purchases but don't clear the full balance.

There are one or two cards (Barclaycard Rewards being one, I think) which do "separate out" spending from promotional deals - meaning you can just clear the spending portion and not pay interest.  But these are very much in the minority - for almost all cards the standard rule of "clear the full balance or pay interest" is applied.

Thank you so much for your detailed response, it is really helpful and makes sense. The only reason the card was used was because it was a new card (old one was expiring) and I had to activate it with chip and pin to make it contactless, otherwise I wouldn’t have used it! 

Next time, you may want to use an ATM for something like checking your balance or changing your pin to activate the contactless functionality on a card.

grumpy_codger

MSE: 

• The five golden rules

DullGreyGuy

kazze12 said:

CliveOfIndia said:

It's because you didn't clear the balance in full.  As above, this is why the golden rule is never to make purchases on a card you've used for a BT/MT promotion.

Because you didn't clear the full balance (including the promotion portion), interest on the purchases becomes payable, just the same as if you've only made purchases but don't clear the full balance.

There are one or two cards (Barclaycard Rewards being one, I think) which do "separate out" spending from promotional deals - meaning you can just clear the spending portion and not pay interest.  But these are very much in the minority - for almost all cards the standard rule of "clear the full balance or pay interest" is applied.

Thank you so much for your detailed response, it is really helpful and makes sense. The only reason the card was used was because it was a new card (old one was expiring) and I had to activate it with chip and pin to make it contactless, otherwise I wouldn’t have used it! 

Thanks again for your help, I’ve learnt something new!

If you arent going to use it until the promo has been paid off why was it important to activate the contactless feature? 

An ATM could have done it for you or you could have just left it until the MT is paid off. 

2catsandcounting

I've just learned the same lesson with Halifax.  I have Barclaycard with balance transfers on that I spend on, clear the spending every month and never had the issue so assumed Halifax would be the same - it was a vets bill and the only card I had on me at the time.  Complained and got the interest back (around £22) and £15 compensation for the rudeness of the person on the live chat 

zagfles

la531983 said:

You are  £30 up, I would give this one up.

Golden rule - NEVER spend on a card that has a balance transfer/cash transfer promo balance on it. Ever. Ever ever.

Move on.

Not "NEVER". It depends on the card. Some cards like Barclaycard and Nationwide it's perfectly possible to spend with a promotional balance and not pay interest. You need to read the summary box to see when the interest free exemption applies. Eg for Barclaycard, in the "Interest Free Period" section, it says "Maximum 56 days from date of new transaction - (including new purchases and cash withdrawals) if you pay your main balance (excluding any promotional balance with a 0% interest rate)...". 

Nationwide say similar IIRC. The highlighted bracketed bit needs to be there. The only faff is you have to manually pay or change the DD every month to your spending. You get better value for the 0% promotional balance if you spend at least the min payment, since you aren't being forced to pay down your debt every month as the payment will go towards your spending raher than having to pay down a 0% debt with the min payment every month. 

But some/most cards aren't like this. Check as above before spending.