Credit card expired 2 years, still paying interest

lifeandtimes

Hi,

Can someone maybe explain this a bit better for me please?

I have a credit card with Ulster bank I took out in may 2011 and then had a limit of 1700.

I travelled and maxed out the card around the xmas of that year. I would throw money off each month and then would use it sometimes again.

Eventually what happened was the card expired in 2014 and they would not issue a new one as i had missed some payments and played catch up with payments. The balance was a 100 or so below the max when the card expired.

Since then I have been paying each month/week without fail however i am still being charged interest each month,even though the card hasn't been used in 3 years.

Is this right?

There's 1000 left on card

The minimum payment each month is 32 euro (I try and pay more when I can) but half of that amounts to interest and basically means I'll be paying a massive amount of interest,nearly double the limit and when I pay it's like 2 steps forward and 1 step back.

Kimbot

Yes, you will pay interest every month until the balanace is 0.

diceyreilly

Without being an expert I would imagine the bank are correct,

They gave you a very high interest loan and the interest will keep building until the loan is settled.

Taxburden carrier

OP, if the card was issued by a bank approach them and ask to have the balance transferred to a term loan with them. Otherwise approach your local credit union with a similar request.

lifeandtimes

Thanks for your replies.

I'm just confused as 3 years since the last time it's been used and I'm still paying really high interest for purchase made on it years ago.

At this rate if I keep paying the way I am I will have paid double the card limit in interest alone over the last 6 years and it just seems crazy to me

Outkast_IRE

lifeandtimes wrote: »

Thanks for your replies.

I'm just confused as 3 years since the last time it's been used and I'm still paying really high interest for purchase made on it years ago.

At this rate if I keep paying the way I am I will have paid double the card limit in interest alone over the last 6 years and it just seems crazy to me

Yes that is why people always aim to clear balance before the end of the month. You agreed to all theses terms and conditions when you took the card.

Pay it off as fast as you can and consider it a lesson learned

elperello

Taxburden carrier wrote: »

OP, if the card was issued by a bank approach them and ask to have the balance transferred to a term loan with them. Otherwise approach your local credit union with a similar request.

This

Get a loan at a reasonable rate of interest and pay off the cc balance.
You will save a lot of money.

jimmycrackcorm

lifeandtimes wrote:

I'm just confused as 3 years since the last time it's been used and I'm still paying really high interest for purchase made on it years ago.

Don't you know what the interest rate is on credit cards? Some are 16% or more.

lifeandtimes wrote:

At this rate if I keep paying the way I am I will have paid double the card limit in interest alone over the last 6 years and it just seems crazy to me

On the statements they are obliged to point out how long it will take to clear the balance if you only pay the minimum. You're paying for the flexibility that a credit card gives you.

As other people mention either take out a loan to clear or sacrifice to pay it off as quickly as possible otherwise it will hang over your head for years.

What might help in the short term is if you apply for a new credit card with another bank that offers zero percent interest on balance transfers for six months. You'll still be in the same position after, but for the first six months you get an opportunity to reduce the balance a little more without paying excess interest.

Wheety

As stated above, your statement should tell you how long it will take to pay off if only paying the minimum.

Also, try this:
http://www.bankrate.com/calculators/credit-cards/credit-card-payoff-calculator.aspx

I tried 1000 at 16% with a payment of 32EUR a month and it says 40 months. That's over 3 years if you keep paying 32.

If your interest is higher, it'll take longer.

lifeandtimes

Thanks everyone.

I really appreciate all your input here.

I'll see if I can get a loan to pay it off but I'm not optimistic as I'm on social welfare at the moment.

Anyway thanks again you've all been really helpful

Kenno90

Hi OP,

If you haven't already i'd strongly recommend you create a budget. See where your money is going and where possible reduce your spending.

A cup of coffee bought everyday on the way into work 2 Euro. Not too bad until you realise thats 40 Euro a month.

As others have mentioned your Credit Card has a very high interest rate. By getting a loan from the Credit Union and paying off the credit card in full. You'll save so much money.

See if your family friends can afford to lend you 1000 euro. Paying them back (generally) is interest free.