P1Fanatic

Just got charged interest (not much) and want to check if Im looking at things correctly.

Statement date is 21st of the month. If on my previous statement (for arguments sake Nov) I had a balance of £500 owing and this month (between nov 21st and dec 21st) I pay in £750 but spend £800 that means my balance is £550 owing.

However the way I understand the interest is that as I paid more in (£750) than the previous balance (£500) then there should be no interest owing on this bill.

Or am I reading it the wrong way? BTW all spendings on the account are purchases not balance transfers, cash withdrawals etc.

And before anyone says credit cards are satins work - I only spend on it to get air miles and can quite easily pay off the whole bill but choose not to as (normally) no interest the way I work it.

Cheers,
Simon.

mannyo

Depends on the order the transactions where processed. If the charges where put through before the credits, then the CC company will use the payments to pay off the newest debt first. That means that you will pay interest on what remains after the payments are processed.

Statement date is 21st of the month. If on my previous statement (for arguments sake Nov) I had a balance of £500 owing and this month (between nov 21st and dec 21st) I pay in £750 but spend £800 that means my balance is £550 owing.

So, the balance of your card rose to £1350, with £800 of new spending. The CC company then process your payment of £750. First they take that away from your £800, so that leaves you with £50 from your new spending and the original £500.

MattN

NO, you pay off the oldest transactions firsts.

If the balance was £500 and payment was made before the payment due date no interest should have been charged.

fast bloke

Did you settle in full in October? If so then you should not have been charged interest

Reality

I suspect this is the source of any potential interest payment.

As Matt said - Provided you paid of the previous months debt before the payment due date then you should not be charged. Did you allow 4 days for post / bank delays etc ?

Horico

depends on the t+c's of the card - go to the section on interest and go through it step by step.

not all cards do it in the same way so if you post up which card someone might be able to translate it...

(I work for a card company and the variations can be massive)

Mungo

That's the way you think it should be processed, but actually mannyo is right in that some card co.'s pay off the new amounts first...Check your T&C's (if you can be ar$ed to trawl through them...)

MattN

It can't work that way as they'd give you incorrect information on your statement. Purchases are made in a set time period and this balance must be cleared by a set date, no interest is payable.

It's regulated, and the way you say it works means you could in effect never pay off your old transactions.

Post up details of a credit card that works the way you suggest as I have never seen one.

Tis all rather interesting.

druddle

That would be for all those "secret" beers and massages on Meeru mate....

Dave