Credit card question...have I been assuming wrong re. statement & interest?

GinG

GinG

GinG

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Morning All,

Very quick question regarding how credit cards work as a little confused as to why I am being charged interest.

I have always assumed that as long as you pay off the balance in the statement month in full you do not get charged any interest regardless of any offers loaded to the card and is only then applied to the balance after the payment cut off date?

Having just checked my statements I have jut noticed on average I have been charged around £26 - £30 interest per month although I was pretty certain I was paying off the correct balance in full!

I do not have any interest free offers loaded on the card just yet as I was always holding back just in case I ever wanted to make a big purchase and pay it off over a certain time frame.

Have always assumed that for example all purchased made between the statement dates are paid off no interest would be added regardless of offers...have I been assuming wrong? Could it be I have missed off something and the interest has just been rolling from an old statement which I may have not paid the correct amount off and in essence being charged interest on interest?

The main use of the card is for company expenses...should I be getting a card with a 0% interest offer to avoid these costs?

Thanks!
 
The normal rules are that if you pay off the statement balance in full before the due date you pay no interest correct

The rules are a little odd though if you fail to do so, you will be charged interest back to the date of the transaction, and if you fail to pay off you balance then you need to see exactly how the payment is used to clear the transactions (ie in which order)

Could you have missed a payment in the past at some point?
 
As far as interest free there are 2 main deals, although often combined

Interest free for x months on new purchases, which means you only need to make the minimum payment (1-3% depending on lender), until the rate expires. Remember if you fail to pay off amounts in full they become interest bearing so there is a big risk you forget to clear in time
And then balance transfers at 0% for x months, these vary little more, some charge a fee to transfer others not, then again you make the minimum payment whilst you see out the fee free period.

before starting to dabble in interest free i would work out whats causing you to not clear you balance, It should be clear from the statement
 
Mercenary Keyboard Warrior said:
The normal rules are that if you pay off the statement balance in full before the due date you pay no interest correct

The rules are a little odd though if you fail to do so, you will be charged interest back to the date of the transaction, and if you fail to pay off you balance then you need to see exactly how the payment is used to clear the transactions (ie in which order)

Could you have missed a payment in the past at some point?
Click to expand...

Thanks for the reply...it may well be that I could have missed a month or maybe even missed a purchase off and this is what is causing the interest to be added as I usually pay off the balance in full at the end of the month and any personal purchases made is usually paid off once items have arrived and I am happy with them.
 
You need to stop thinking about it all happening at the "end of the month". Credit card bills are due when the bank says they are due. Both my credit card bills are (handily) due at the beginning of the month. But this slips a day or two every no and again, presumably because of the number of days in each month.

TLDR; Read the bill and it will tell you how much to pay, and when to pay it by. Is it that hard? :confused:
 
Credit cards can be useful in an emergency when you don't want or don't have the money in your current account, but ultimately you're always better off building up your current account to have a healthy balance there to cover unexpected costs. I refuse to use credit cards, instead I just save up and then buy. No credit, no interest charges.
 
Scam said:
You need to stop thinking about it all happening at the "end of the month". Credit card bills are due when the bank says they are due. Both my credit card bills are (handily) due at the beginning of the month. But this slips a day or two every no and again, presumably because of the number of days in each month.

TLDR; Read the bill and it will tell you how much to pay, and when to pay it by. Is it that hard? :confused:
Click to expand...

Sorry didn't mean it like that...for example my statement starts from 6th of the month, I will then get a text alert to pay the balance in full within x amount of days which is done well within the time frame. If I am honest I track all expenses and purchases on a spreadsheet and go off that instead of the statement, as above I wonder if I am being charged interest on a personal purchase which I usually pay off as soon as the item has arrived in the post and I am happy with.
 
Sliver said:
Credit cards can be useful in an emergency when you don't want or don't have the money in your current account, but ultimately you're always better off building up your current account to have a healthy balance there to cover unexpected costs. I refuse to use credit cards, instead I just save up and then buy. No credit, no interest charges.
Click to expand...

I mainly use it for work expenses which I submit at the beginning of the month, get them paid on 21st of every month and then pay off the balance when I get the text alert from the bank. Some months my expenses can run into the thousands so rather not use the current account! All internet purchases are paid using the CC for security but I pay these off as soon as they arrive so I could be sending 20 - 30 payments per month to the card! It may be that one of my purchases from a previous month was missed.

The main point about this thread was if I was assuming correctly that purchases made within the statement period and paid off in full when required does not incur interest regardless of a 24/36 month interest free offer is loaded or not.
 
Sliver said:
Credit cards can be useful in an emergency when you don't want or don't have the money in your current account, but ultimately you're always better off building up your current account to have a healthy balance there to cover unexpected costs. I refuse to use credit cards, instead I just save up and then buy. No credit, no interest charges.
Click to expand...
I've had a credit card for the best part of 10 years and use it for absolutely everything, only use my debit card to withdraw cash, and I've never paid a penny because I've paid it off in full every single month.

Nothing wrong with credit cards if you use them properly.
 
Sliver said:
So if it's used for work expenses mainly, does your employer not reimburse you?
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Well I have stuck on the interest in this months expenses claim so yeah! I was just making 100% sure that I was assuming right regarding the interest free period moving forward.

Like I mentioned above this interest could have been from a missed payment or missed expense or personal purchase that has just kept on rolling...starting from scratch again this month so will be fine.

I didn't want to load an interest free offer on the card if I didnt need to, this particular card has just short of £18k limit so will come in handy to purchase a car ot something later down the line.
 
GinG said:
The main point about this thread was if I was assuming correctly that purchases made within the statement period and paid off in full when required does not incur interest regardless of a 24/36 month interest free offer is loaded or not.
Click to expand...

yes that is correct - the posters taking about interest free offers etc.. are going off on a tangent - for a credit card the purchases made within the statement period are interest free, this has nothing to do with special offers for 0% interest etc...

so what may have happened is perhaps you have somehow been paying late - I'd phone the card company and check with them - have you got things set up to pay automatically by direct debit, that would avoid any mistakes in that regard?

secondly while purchases are interest free some transactions aren't - namely anything counted as a 'cash' transaction - that could be using a cash machine here or overseas and some other transactions like buying foreign currency or gambling will count as cash too - in this case you'll not only accumulate daily interest from the date of the transaction but often the interest rate for cash transactions will be higher than that for purchases

anyway I spent a whole summer once as a temp dealing with this stuff in a bank years ago - just phone them up and they ought to be able to see fairly easily where the interest charges have come from and explain what has happened to you
 
dowie said:
yes that is correct - the posters taking about interest free offers etc.. are going off on a tangent - for a credit card the purchases made within the statement period are interest free, this has nothing to do with special offers for 0% interest etc...

so what may have happened is perhaps you have somehow been paying late - I'd phone the card company and check with them - have you got things set up to pay automatically by direct debit, that would avoid any mistakes in that regard?

secondly while purchases are interest free some transactions aren't - namely anything counted as a 'cash' transaction - that could be using a cash machine here or overseas and some other transactions like buying foreign currency or gambling will count as cash too - in this case you'll not only accumulate daily interest from the date of the transaction but often the interest rate for cash transactions will be higher than that for purchases

anyway I spent a whole summer once as a temp dealing with this stuff in a bank years ago - just phone them up and they ought to be able to see fairly easily where the interest charges have come from and explain what has happened to you
Click to expand...

Thanks Dowie,

As I have spotted it this month I am expensing the charges and paying off in full (do it as a manual payment), if next month I get charged more interest I shall phone up and get them to confirm what it actually is causing the interest...no gambling(!) although when I was over in Dusseldorf the other month I did take cash out the wall, it may well be this!
 
Am I correct in saying that if the employer reimburses your credit card transactions related to your job, then they will also be responsible for any interest charges.
 
Sliver said:
Am I correct in saying that if the employer reimburses your credit card transactions related to your job, then they will also be responsible for any interest charges.
Click to expand...

Would depend on what the agreement is between you and the company.

My expenses are paid back each month (June expenses submitted 1st July and paid by 15th July into my bank account), but only on actual receipted purchases. It is my responsibility to ensure I pay off anything I put on a credit card before incurring any interest, but I always ensure I have a 0% interest on payments credit card available and generally anything I need to purchase that would actually require me to use a credit card (hotel, flight etc) I can put on my company card rather than my personal one which only gets used in emergencies for work stuff.
 
As i said at the top, if you missed a payment you will be paying interest back to the date of transaction, and if your not clearing the balance in full this makes quite a diff

Also as i said in post 4, cash from the date of withdrawl, and now you confirmed you made a cash withdrawl that will deffo not help your situation

Your making it more complicated than it needs to be

If you have very significant expenses I would take out another card for your personal spending, keep your expenses on one card, then if you do want to pay off the items as you buy them its easier to track
 
but you say you always pay off the card at the end of the month??

either you do or you don't - i don't see how you could miss a payment???
 
You should just set up a direct debit to settle the full amount, makes credit cards a breeze
 
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