Do I owe the interest or not?

Jennifers

Heres a wee question for ya's! Last year I ran up quite a hefty credit card bill with MBNA that included some cash withdrawals, which I know incurr very heavy interest charges.

I had full intentions of paying it off as soon as possible in one lump sum which I did and the month after I paid it off I got another bill for the interest only which I paid that was for around £30 then the month after that again I got another bill for around £80 which was for interest only. I couldn't understand why I was getting another bill two months after I had already cleared the balance so I rang MBNA who told me that its the way ther calculate their interest charges on cash withdrawals and that I was liable to pay it so rather that scerw up my credit rating I just paid it but now I am wondering if I should have??

Does anyone know if this is correct that they charge the interest in this way? And if I can get this back form them??

I would be very grateful for any replies.

Jen

skyrider007

Ring them and discuss what's happening.

King_Of_Fools

Lets assume the following scenario:
- take £X money out on 20th Feb
- bill received on 1st Mar with £30 interest for £Y (= X+30)
- bill paid in full for £Y on 20th Mar
- bill received on 1st Mar with £80 interest

This is perfectly valid the £30 interest would have been on the cash from 20th Feb - 29th Feb and the bill would be for £Y (= X+30). There would then be interest accruing daily from 1st Mar on £Y. When £Y was paid on 20th Mar then this would have left the interest on £Y still to pay as is shown on the next bill.

exel1966

Yes it is correct and you have to pay the interest due. You cannot claim back interest as it's not a penalty charge.
You must have a clear balance for two consective months to stop further interest being accrued.

NickX

exel1966 wrote: »

Yes it is correct and you have to pay the interest due. You cannot claim back interest as it's not a penalty charge.
You must have a clear balance for two consective months to stop further interest being accrued.

Yes, residual interest is what you describe here.

However reading the OP's post, they were charged £30 interest only which was paid, then received a bill for £80 interest only.

This does not look right, the final payment should only be a small proportion of the previous one, not over 100% more.

I'd phone them and ask for an explanation.