HSBC interest charges

Pimlicowanderer

I recently had an unexpected item of expenditure so when my credit card bill came in I paid off most of it, but not all. I paid well over the minimum and well within the payment date. I paid the balance off four days later.

HSBC wanted to charge me interest on the total amount of the bill. I had assumed that I would only be charged interest on the difference between the bill total and the amount that I paid off. I phoned HSBC and they were very pleasant and waived the interest charges but I'm still very puzzled by this. Looking at the 'bumf' at the end of the credit card statement and on the HSBC website it certainly gives the impression that interest would only be charged on the difference but in fact it doesn't spell that out clearly in plain language that a lay person could understand. Am I being dim? Has anyone else experienced anything similar with HSBC or any other bank?

katejo

It's normal with most (probably all) CC that you have to clear the whole balance by the given date to avoid interest being added. If you don't, interest is charged in the whole balance and any new transactions until you clear it in full.

TadleyBaggie

The original interest charge was correct, if the statement balance was not fully paid off, interest is charged on the full statement balance. That is the way that all credit cards work, the fact that they waived the interest is a bonus, they didn't have to do that.

tom192

You may see some next month too even if you have now cleared due to trailing interest. After next month you should be clear after that though.

Peter999_2

You've done very well getting the interest waived as this is how credit cards work. The normal advice is that if you can't pay off the whole of the balance then only pay off the minimum as the amount of interest will be the same (Martin Lewis did mention it on one of his shows a few years back).

kaMelo

https://forums.moneysavingexpert.com/discussion/6689195/hsbc-interest-charges

Your not being dim, it's just that things work the opposite way to what many people think.

The entire balance on any credit card statement is always interest bearing except in certain circumstances. Promotional periods of low or zero percent interest are one example, another is if you pay off the entre statement balance by the due date. Paying off most of the balance does not equal all of the balance, therefore interest is chargeable on the entire statement balance. It's not just HSBC, every credit card works this way.

You have done very well to get the interest waived but be aware there may be some trailing interest on your next statement too.