Didn't tealize the crdit card interest scam, do you?

eltwins

I am insensed as to what I found out tonight!

We had a balance of £350 on our credit card and paid off all bar £6.99 (as this was to come from somewhere else). Then I forgot to pay the 6.99, so that was oustanding.

The new statement came through as owing 6.99 plus 6.38 interest. When asked why the interest was so high, they said this...

If you do not pay off the whole balance you are charged interest on that whole balance. i.e we have been charged interest on the £350, despite paying off all bar 6.99 of it!

So, if our balance had been £2000 and we had left 6.99 oustanding our interest would have been £40!

How are they allowed to get away with this?!

ryandj

Its in your credit card terms and conditions unfortunately.

Eydon

That's how credit cards work - always has been as far as I can remember.

NickX

It is one of the sneaky Credit Card company tricks - you only get the 59 day interest free period if you pay your card off IN FULL.

Even if you are short of the full balance by 1p, then they will charge you interest from your Transaction Date.

It is in the Terms and Conditions, but in tiny print so that many people do not realise that.

eltwins

But it didn't used to be like that.

SO I owe 6.99 and the interest is 6.38! that is over 90% interst on my DEBT. And lets face it interest should only be charged on your debt not on how much youhave spent that month!

NickX

No, the interest accrues on the £350 from the Transaction Dates until the payment is made. The £6.38 is accrued on Transactions totalling £350, not £6.99.

You only get an interest free period if you pay the FULL statement balance.

To my knowledge Credit Cards have always worked like this.

Voyager2002

NickX wrote: »

No, the interest accrues on the £350 from the Transaction Dates until the payment is made. The £6.38 is accrued on Transactions totalling £350, not £6.99.

You only get an interest free period if you pay the FULL statement balance.

To my knowledge Credit Cards have always worked like this.

Yes, I remember this from my first credit cards in the 1970s.

eltwins

No they have definately not always been like this!

Yes the interest of 6.38 is on the £350 but in effect my debt is only 6.99, the interest should be on that. It is ridiculous!

It did not used to like this.

NickX

eltwins wrote: »

No they have definately not always been like this!

Yes the interest of 6.38 is on the £350 but in effect my debt is only 6.99, the interest should be on that. It is ridiculous!

It did not used to like this.

Well I disagree with you, I think they have always been like this and I've been using them for 20 years.

Having said that it is one of several sneaky ways the Credit Companies catch people out and do understand why you are angry.

Eydon

Have to agree with NickX on this one - it has always been like this.

I remember when I worked at Barclaycard (over 10 years ago). My boss was making a payment to his Barclaycard over the phone. He couldn't remember the exact pence amount, so like a fool he rounded down to the nearest pound. Cost him a very tidy sum in interest - and he was a member of staff!

eltwins

Well they can see that we intended to pay it all off. Who would leave 6.99 outstanding? But they are offering nothing for goodwill, when we have paid off the card each month, never been late etc etc. So we have cancelled the card and they would rather lose a customer! Speaks volumes.

It was a Virgin Credit Card !