Please help on Interest rates

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  • Im at a point now to just clear the balance, set up a direct debit for £800 and not exceed this and each month this will pay off and clear so I avoid interest moving forward, I will pay trailing interest but after the second month I will not be paying interest, i can learn from this lesson what are your thoughts?
  • Thanks Penners

    May statement credit limit 2 750
    I paid 800
    new transactions 580
    new balance 1317

    next payment due 8th june which i just paid 800
  • Ebe_Scrooge
    Ebe_Scrooge Posts: 7,320
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    edited 5 June 2019 at 2:42PM
    Im at a point now to just clear the balance, set up a direct debit for £800 and not exceed this and each month this will pay off and clear so I avoid interest moving forward, I will pay trailing interest but after the second month I will not be paying interest, i can learn from this lesson what are your thoughts?

    You need to pay the full balance off this month, whatever the figure is. Spend on the card if you wish. Next month, you'll get a statement which will show what you've spent, plus a bit of trailing interest. Pay that in full. From then on, spend on the card and pay in full every month, you'll pay no more interest. Set up the DD to pay "The Full Amount", not a fixed amount.

    A credit card has many advantages if used properly. As well as the potential for point/rewards/cashback/whatever, a properly-managed card will reflect positively on your credit history, which is good if you ever want to apply for more credit in the future. You also benefit from Section 75 protection (see the relevant article on the main MSE site for an explanation).

    I'm a bit puzzled as to how the interest came as a surprise to you. On the front of every statement it says "If you only pay the minimum amount it will cost you more and take you longer to repay what you owe".
  • Thanks Ebe

    This is exactly what I intend to do moving forward, I learnt
    my lesson, Thanks

    :beer:
  • Thats the thing, I never bothered to look at the statements, I was only using it from the app and on the app it says nothing about interest charges.
  • Just want to say thank you to everyone on here who had taken the time to comment and provide me with good advice moving forward
  • Sncjw
    Sncjw Posts: 3,500
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    WHIch bank are you with.

    Also do you realise they charge interest from the day you purchase things as well.

    the interest charges won’t be in small print it will be listed in normal print on your statements. There is statements there for a reason.
    Mortgage free wannabe 

    Actual mortgage stating amount £75,150

    Overpayment start date 1/3/23.

    Starting balance £66,565.45

    Current balance £63,787.16

  • xebruary
    xebruary Posts: 45 Forumite
    Now on a more detailed look on the bank statements when I downloaded them I was angry to see "next months estimated interest will be £40, its always been around £35-40 interest.

    A point that hasn't been picked up on so much is that it is the estimated interest you have spotted. Based on the way you say you have been using the card, you are likely to be paying less interest than this. Next month's estimated interest is a calculation assuming you make only the minimum payment and it is on time, and it will still be around £35-40 (or at least it will not be zero) even when you are clearing the balance each month.

    You will find the actual interest paid a few lines up in your statement, or you can see the charge in the transaction list.
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