Credit Card Interest Question

Fry

I just got my credit card statement today. I was shocked in horror that the interest on purchases (which is 1.449% btw) was E51.04. Could someone tell me is this right ?

Previous Balance = 2099.70
Cash Payment = 1500.00
Interest charged = 51.04
on purchases
@ 1.449% per month

Now this seems very high. Usually when my balance is around the 350 mark, the interest is around E5.70

The reason being the balance is high this month is because I paid my car insurance with is. Is this a purchase ?

Thanks guys

Zaph

My understanding is that unless you pay off the entire balance you get hit for interest on the full opening balance on the statement. It happened me this month as well, I owed 4,100, paid 3,000 before the due date and the balance afterwards (I was waiting for people to repay me for a holiday), but I got hit for EUR 56 interest this month. Of coursemy undeerstanding could be wrong and they're just a shower of b*st*rds!

Fry

Thats abit high though! I dont think you pay for the full balance (ie 2099) Even if I did, it would still be less than 51 euros!

What I did it the past, and I came up with the right interest due was multiply what you owe after paying off by 0.01449.

For example a couple of months ago my balance was around the e300 mark. 300*0.1449 which is around the 4e mark. The actual interest was e5 something.

If you take my balance this month (2099-1500)
600*.01449 is around e9!

Better call them.

Am I right with this assumption ?

De Rebel

Originally posted by Fry
Am I right with this assumption ?

No, probably not. Unfortunately for you.

Usually these usurious scumbags charge interest on each item on your previous bill, from the date of the original transaction, unless you paid that bill IN FULL, which you didn't. So they charged you interest on EVERYTHING on the previous bill, not on the balance remaining after your previous payment. (As a matter of deep rooted principle I pay them in full every month, on the dot. I once sent a cheque for say 4028 pounds instead of 4082 pounds, by accident - you should have seen the interest they attempted to charge - I fought it and got a refund in full, but only after threatening to move all my account from the bank) You can check the interest you were liable for by looking at your previous bill – it should be shown.

Unfortunately, you have no comeback. NEVER EVER part pay. ALWAYS pay in full. Or get a term loan or an overdraft to pay it off. NEVER use a credit card for short term finance - either save in advance, or get a proper overdraft. Or rob it from your mother.

Interest rates at present are something like the following:

Deposit - .01% (they pay you)
ECB - 2.5% (Determines the rate at which they can borrow)
Mortgage - 3.5/4%
Term loan - 12%
Overdraft - 10%
Credit Card - 18%

Let this be a lesson.

Fry

I'll ring the f***ers anyway..
If the push comes to shove, I'll go to a different bank, although I know they are all as bad as each other. Im with boi now btw..

RainyDay

Originally posted by Fry
I'll ring the f***ers anyway..
If the push comes to shove, I'll go to a different bank, although I know they are all as bad as each other. Im with boi now btw..

Don't forget that you will be liabile for two hits of the 40 stamp duty charge if you have two accounts open during the year.

ur mentor

wow. Thats is a high interest rate.
It is unusual for someone to check accounts and try to figure out rates. well done to you. In UK there are a range of private cos that check out statements using specialist software. they only get paid if they find mistakes banks make and you get refund.
Win win for you and them
anyone here doing that.?
Best advice is to get a standing order set up to clear account every month. Needs overdraft however. ever wonder why bank wil lgive you credit card yet struggle to give you an overdraft. Don't forget Credit unions- absolutly brilliant.
at least with odraft you are paying half the headline interest rate and it is on a daily outstanding balance not on the opening balance until cleared in full!

Fry

Rang them today. The lady (nice) told me that I had to pay interest from when I bought the goods (4 Aug) until now because I didnt clear it all in time. I told her that was crazy and I didnt know that, and if I did I would have cleared it all. She said she'd refund me E35 because I didnt know, and to clear it all next time and dont be caught out again. Nice Lady !!

shoegirl

Credit cards are great for smallish (<€100) payments, but really bad for big payments - strange as it sounds, it would have been cheaper to do a deal with your insurer to pay in installments. Many will let you pay over 6 months interest free for a small fee (used to be £10).

I usually pay cash for anything over €100 - where possible.

RainyDay

Originally posted by shoegirl
Credit cards are great for smallish (<€100) payments, but really bad for big payments.

Hi Shoegirl - I disagree. Credit cards are great for all kinds of payments, big and small if (and here comes the big if) you clear your statement in full each month.

Pink Bunny

Wow Fry, sounds like you did the smart thing by calling! I have also found that if I have a problem like that it's best to call and at least give it a try. If nothing else, I feel like at least I did try to do something, and in your case it worked out. Good for you.
FYI, although it's a real bother, I always try to read the little booklet that comes with the new credit card, including the small print.

Big al

I honestly believe that your credit card limnit shouldnt be more than 30% of your monthly income, the bank are constantly putting my limit up and i am constantly telling them to lower it, it saves you all the bull with the part paying.

Our man in Havana

Originally posted by Big al
I honestly believe that your credit card limnit shouldnt be more than 30% of your monthly income, the bank are constantly putting my limit up and i am constantly telling them to lower it, it saves you all the bull with the part paying.

If the banks keep increasing limits and someone gets into trouble with payments wouldn't the bank be negligent in increasing the limit without regard to income etc?

Victor

Originally posted by Bond-James Bond
If the banks keep increasing limits and someone gets into trouble with payments wouldn't the bank be negligent in increasing the limit without regard to income etc?

No. It is reasonable to give personal loans of 0.5-1.0 times annual salary. What you can do is write to them and tell them not to increase your limit without permission. This is where most people get caught they start off with a manageable €500 limit that rises to €2,000 (or more) in 2 years and then they loose their job and can't pay it off.

Our man in Havana

Originally posted by Victor
No. It is reasonable to give personal loans of 0.5-1.0 times annual salary. What you can do is write to them and tell them not to increase your limit without permission. This is where most people get caught they start off with a manageable €500 limit that rises to €2,000 (or more) in 2 years and then they loose their job and can't pay it off.

What happens then? Cant get blood from a stone.

long_b

Does anyone know of a card company who's doing 0% interest on balance transfer for the first X months ?

Ta

Our man in Havana

Originally posted by long_b
Does anyone know of a card company who's doing 0% interest on balance transfer for the first X months ?

Ta

Tesco 0% for 6 months on transfers

eth0_

Originally posted by long_b
Does anyone know of a card company who's doing 0% interest on balance transfer for the first X months ?

Ta

Uh...mbna of course. There's a good finance guide in the Money section of the Sunday Times, lists the best deals on credit cards and loans etc

long_b

Thanks !

I want to move from MBNA - I'll check out the Tesco deal ..

Victor

Originally posted by Bond-James Bond
What happens then? Cant get blood from a stone.

It means you start giving them more and more of what you have, they can wait - after all they get paid to wait.