Paying Egg Card Off

binnie

The other day I paid my credit card off with Egg and emailed them to ask them to close the account down altogether.

This is their reply.

Dear Madam,

You?ll receive a statement in June 2008 with residual interest on this is due to you not clearing your full statement balance when you first made transactions with your Egg Card and only paid the minimum or a fixed amount.

The balance that was then carried forward became what is known as a revolving balance and therefore accrued interest on a daily basis until you cleared that balance in full on 10th June 2008. The interest that will be applied once you had cleared your balance is known as trailing interest and will apply until you clear your full statement balance for two consecutive months.

For further information on interest please copy and paste the link below into your web address bar and view section 4:

new.egg.com/visitor/0,,3_11087--View_1068,00.html

Thanks for your message.

Regards

Internet Customer Services


Is that right, I would have thought if I had paid the balance off in full, then that would be it.

Moggles_2

Yes, that's right. If you were being charged anything other than 0% interest on your previous statemented balance, there would be some residual interest to pay.

DestroyingAngel_2

The thing to remember is interest is always charged in arrears. If you always paid off your balance in full, you'd never see any interest on your statements. However, if you only ever pay the minimum or a lesser amount than the full balance, you'd see interest every single month (unless of course if you were on a 0% promotion).

To illustrate how interest works, when you make a payment on your March statement, you're actually paying off February's interest. So, when you pay your April statement, you're paying off March's interest. You'd therefore need to pay off 2 consecutive month's balance in full and on time, for the interest to disappear.

If you've been paying your balance off in full each month and on time, and suddenly you miss a payment, you'll then see interest for the next 2 months, even if you start paying off your balance in full again. The first month you pay off in full will include interest from the month before, as explained above. The 2nd month's statement will have "residual" interest, which is the interest applied on a daily basis from the time the statement is printed to the time your payment clears.

binnie

Thanks both of you. I've paid my balance off with Virgin before, and they wavered the interest, so I thought they all did.